In the past, both BA
and Virgin have both made false arguments in order to undermine the success of any open-skies negotiations between the US and Britain.
Among the false arguments:
1) Cabotage - For any foreign carrier, the logistics of doing so on a medium to large scale would be enormous. No foreign carrier has the US infrastructure to mount a US domestic network of their own. And, their US partners wouldn't be too keen about helping them since it would literally mean setting up their own competition.
What cabotage would likely turn out to be for the biggest of the European transatlantic carriers is a network of tag-on flights, such as JFK
tagged onto for example LHR
. However, that isn't as easy to pull off either. Even if the US agreed to that, facilities at LAX
to handle those additional flights do not currently exist. The Tom Bradley terminal certainly can't handle them. Moreover, "peak-time slots" at JFK
, specifically domestic ones, are restricted. So, any European carrier contemplating such a flight would have to buy or lease a couple of slots (just for JFK
) from an incumbent carrier. At JFK
the biggest holder of those slots is AA
. I just don't see them handing them over to Air France, so that they can erode AA
's yields on that route.
Moreover, you have to imagine what such actions on the part of EU carriers would do to their currently established relationships with US partners. The basis of any cooperation would effectively disappear if instead of relying on Delta to ferry codeshare passengers from JFK
Air France would now try to compete directly with Delta on that lucrative route.
Provided the EU airlines, including Virgin Atlantic, have thought this through, you see, then, that there is nothing really to be gained from cabotage. US carriers, like Delta and TWA, realized that long ago. Both had European hubs and the right to pick up European passengers at points beyond the hub. Those hub operations are long since defunct.
2) "Fly America" rule.
EU carriers would also gain nothing from removing this restriction.
Unless removing this restriction results in structural and deep philosophical changes in the way that the US government awards military or government contracts, civil cervants and military personnel on government business will continue to fly US airlines exclusively. Why couldn't that happen? Well, because in the one other instance where a similar policy was also altered in response to a trade dispute (over military procurment projects), the track record has shown that the US continues to do business only with US-based companies. I am, of course, referring to the circumstances related to the air-tanker procurement. Despite all appearances to the contrary, Airbus was never a serious candidate to win the contract.
3) Foreign ownership of US airlines
This argument is both false and true, depending on who makes it.
If Richard Branson is making it, it most likely is false. Truth is, and Branson knows it, that the window of opportunity for launching a low-cost airline in the US has long since past. The market can probably only sustain the one's currently in existence and their continued level of growth.
Prior to the emergence of JetBlue, Branson might have been speaking truthfully. Now, it can only be seen as a move to delay any progress.
Even back then, one had to wonder whether Branson had carefully considered the proposition. Because if he had, it would have naturally occurred to him that if foreign ownership were to be allowed under an open skies regime with full access to Heathrow, there would be no stopping AA
from fully merging. That would not have been a very good outcome for Virgin in the long run. Personally, I am one who thinks that he had considered this outcome. And, that in opposing open skies unless he got full ownership rights, he really was being disingenuous.
Management at BA
has also made this argument from time to time. When they were just starting to form their US strategy, and when that strategy still involved US Air, they actually meant it. Full ownership of US Air would have provided them with control of their own US domestic network. Not sure how much more successfull they would have been at running US Air than others have been since. Remember, British Airways hasn't been any more successful at competing head to head with low-cost carriers in Europe.
After it cashed in its investment in US Air, BA
management stopped making this argument. Instead, they became willing to accept full access to Heathrow if the US approved their virtual transatlantic merger with AA
. Neither airline was looking to own the other at the time; they just wanted anti-trust immunity in order to operate as a single airline over the Atlantic. Well, we all know what happened to that proposal.
Since then, BA
have managed to get approval for a codeshare operation on points beyond their respective gateways and hubs. In light of the AirFrance/KLM merger, BA
management is even talking again about a full-merger between BA
, Iberia, and AA
. What a transatlantic behemoth that would be across North and SouthAmerica! Whatever the case, this argument now holds more truth for BA
than it has in the past.
So, having put these false arguments aside, let's deal with the most false argument of all - Continental's outrage at the sale of these slots.
Previous posters have already deduced what makes this argument false, the fact that UA
had no choice but to sell them to an incumbent LHR
You've got to give management at Continental credit, however. They're starting to sense that they are not going to gain much from a Pan-European open skies treaty. All the EU can do is provide empty promises that LHR
will be open to all US Airlines. Unlike the British government, it can't provide US carriers with free slots. So, Continental may just have to purchase them on the open market if they are not all gone by the time they earn the rights to fly to LHR
. Add to that the specter that with full open-skies between the EU and US, AA
will get defacto anti-trust immunty without giving up any slots and now suddenly the situation gets very depressing for Continental. I'd be outraged too. But, you know what. What was really outrageous were the demands Continental/Delta/Northwest made to the DOT when AA
/BA last requested anti-trust immunity. Delta alone requested over 120+ weekly slots. So, these three deserve everything they don't get.