Thread: Heathrow-2
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Old 22nd Apr 2018, 10:48
  #455 (permalink)  
Join Date: Feb 2016
Location: Leeds
Posts: 496
Originally Posted by Fairdealfrank View Post
Think the point made by LHR management is that with expansion, the supply-demand situation with slots changes and the secondary slot market disappears. With slots freely available the biggest obstacle to smaller operators on thinner routes is removed.

The recently announced discount on airport charges for domestic routes will help, that leaves the second main obstacle, double APD.

Obviously commercial viability is the determining factor and it would be up to pax on these routes to use them or lose them. That is why LHR management states that regional routes COULD be served, not WILL be served. .
First and foremost, the biggest obstacle to thinner routes (wherever those routes may be) is a commercially viable market.

The central message from the likes of BE is that there is no viable domestic market to LHR, in part because of competition from cheaper and/or better alternate options. For connecting passengers this is the European hubs, for O&D it is the other London area airport's or the railways.

Quite frankly, LHR is not (and under the presently proposed scheme will not be) set up for small regional routes. As you say, charges and slots are an issue, but whilst LHR remains (as proposed) more expensive than the likes of CDG, AMS, FRA, MUC, DUB then the likes of BE will continue to find it commercially more attractive to fly feeder services to alternative hubs.

The commercial reality is that the Government is now considering the use of PSO (Public Service Obligation) for regional links to LHR. This is a subsidy and, if it comes to pass, means the cost of connecting the regions to LHR is substantively borne by the UK taxpayer.

In other words, the regional connectivity argument is not going to carry much (if any) weight under the current scheme.

Dave Reid has addressed the point about LHR's misleading tactical approach to expansion.

Originally Posted by Fairdealfrank View Post
Not convinced that it is a slot sitter: why open a new route just to do slot-sitting, wouldn't it be better to increase frequencies on existing routes for this purpose? It would save the expense involved in opening and running a new station..
Well BA cut down the LBA service at around the same time as adding additional new long haul services. As I understand it, LBA was never a "new station" as no overnight stopper was based/accommodated (thus making it less effective for connecting traffic). I think this tells you all you need to know about how valuable BA view this route within its overall network.

Originally Posted by Fairdealfrank View Post
Would imagine that BE is testing the market to ascertain if Heathrow operations are viable in the long term, and if so, get its foot in the door ahead of the competition..
This may be true, I understand of the viability of the present operation relies on the ability to sell the slot pairs after a given period of operation. If the secondary slot market disappears, so does the commercial viability.
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