Open Skies, Britian and US. Will it every fly? How?

[Grendel]

Just a question for those on the other side of the pond. BA and any partnership with a major U.S. partner seems to be dead on arrival without increased acess to LHR.

Is this fair, reasonable, practical.

Your opinions, flames, retorts greatly appreaciated.

"It's so simple a child of five could understand it." "Fetch me a child of five." Groucho Marx.

[shon7]

Its totally fair. In fact they should abolish this whole anti-trust immunity thing. The airline industry today is a fiasco and as an analyst with Goldman Sachs put it ," a text-book study in value destruction."

Airline bosses have been predicting that consolidation is the only viable solution. I'd respond to them, " try getting better not bigger."

LHR and a BA alliance is a unique case , London being such a big financial center- consequently a lot of business travellers. Companies like Virgin have stood their ground on basis of better service alone. Let BA show if it can really stand its own ground without any of this price-fixing, anti-competitive alliance stuff. They have already seen it in the domestic market with the new low cost carriers -especially Ryanair- whose case only goes to prove that passengers would have everything to lose with an alliance of any sort. If the airline is good enough and provides great service they wouldn't have to worry about weak load factors and passenger numbers.

[dusk2dawn]

And then the odd player from the sideline: the European Court of Justice who on thursday 31th is scheduled to issue a preliminary ruling on the memberstates right to conclude and apply a bilateral "Open Skies" agreement with the United States.

[Notso Fantastic]

Grendel- you are a member of fairly long standing. Have you read the introductory spiel to this forum? This is a Rumours and News area. If you want a general and wide ranging discussion on aviation topics in general, like the other person wanting to start a discussion on A380 v Sonic Cruiser, may I suggest you remove it to the Questions Forum? This is Rumours & News!

[Hand Solo]

Well here's my tuppences worth. LHR is a unique case amongst major European hubs as its surrounded by densely populated areas prohibiting any significant expansion. It has only two runways, which due to environmental considerations cannot both be utilised simultaneously for arrivals and departures. It is restricted in the number of night movements by further environmental issues. It is the busiest international airport in Europe but in terms of area is also one of the smallest and most congested major hubs. In essence, there is no more space at LHR. If extra slots were available, they'd have been snapped up already by British carriers. BA have historically been the major operator at LHR. They're only feasible alternative is to use Gatwick, over 90 mins drive away with no efficient, fast or reliable transport links between the two. In short, it cannot run the two airports as one hub, each must stand alone. Now Uncle Sam has had his beady eye on LHR for a long time and particularly the lucrative business passengers who use it. He's aware that BA's future growth is dependent on access to the USA through an alliance, and consequently is determined to extract the maximum penalty from the UK. Thats why he wants 224 slots, largely from BA, to allow four US majors into LHR. BA is able to compete with them based on product alone, the airline regularly beats all comers in business traveller awards. However BA, and Virgin, cannot compete with the US carriers when they are receiving $10 billion dollars in federal aid, when they are able to adopt predatory pricing policies, funded by revenues from their huge domestic market, when they can defend themselves from bankruptcy with Chapter 11 where BA would go to the wall, and when they are subsidised by protectionist US government policies like "Fly America". To attempt to compete on such unbalanced terms is financial suicide. So until the Amercians decide they want fair competition, instead of federally imposed market dominance, then there'll be no deal, and judging by the usual US government stance in most form of world trade negotition, it'll be a long time before we break this stalemate.

[shon7]

"BA is able to compete with them based on product alone, the airline regularly beats all comers in business traveller awards." -

depends on what magazines you read, pools you follow and how much merit you attatch to these.

"...when they are able to adopt predatory pricing policies, funded by revenues from their huge domestic market."

domestic market situation is changing fast- budget carriers and business charter operators are driving the airlines to change their pricing (yeild management system), hub-spoke philosophy, customer service. As for revenues from domestic market - BA had the same opportunities and tried to set up their low cost arm. Ryanair and Easy Jet have taken over that market which is "HUGE" in terms of lost opportunity for BA. When you read about Ryanair becoming the largest airline in Europe and their Market Cap exceeding that of BA and Lufthansa think ," that could have been BA."

"Uncle Sam has had his beady eye on LHR for a long time and particularly the lucrative business passengers who use it. He's aware that BA's future growth is dependent on access to the USA through an alliance, and consequently is determined to extract the maximum penalty from the UK."

Governments will always do what is good and beneficial for their "OWN" countries. Some of the European countries have signed ridiculous bilateral treaties with the US allowing US carriers fifth freedoms and giving them a lot of concessions. Hopefully the EU will do whats good for the whole union rather than one or two member states.

"So until the Amercians decide they want fair competition, instead of federally imposed market dominance, then there'll be no deal, and judging by the usual US government stance in most form of world trade negotition"

BA is the last airline who should accuse anyone of unfair and imposed market dominance. What about the whole fiasco with Virgin Atlantic and Richard Branson and the early retirement of Lord King?

"To attempt to compete on such unbalanced terms is financial suicide."

Carriers like Virgin, Southwest, Jet Airways, Easy Jet, RyanAir... have done it and WON- not against one airline and one govt. but against multiple airlines and multiple govts.