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Old 26th Sep 2011, 10:43
  #2758 (permalink)  
le grand fromage
 
Join Date: Oct 2007
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According to LH the slots were auctioned to the highest bidder, which is the normal way these days to offload slots, so Star carriers (and VS) would have had the abiility to take them if they needed them and were prepared to pay the price. As previous posters have suggested, looks likely that these were slots leased to LH Italia which is closing down, and clearly no way bmi want to have to slot sit an extra 6 pairs starting in the winter, which would almost certainly lead to additional losses.

Interesting listening to the LH analysts webcast of last week when Gemkow, the LH CFO, said that they had received a lot of interest for bmi (didn't specify which bits), and that they had concluded that even if it could be turned around, it would never earn enough to cover the cost of capital invested. LH would of course want to talk up the level of interest as the only way it will get any sort of reasonable price is if they can generate some competitive tension between the prospective bidders. Given EU ownership constraints I can't see any way that the business can go to anyone other than BA or VS (gulf carriers limited to minority stake) and whilst BA may have to give up a few slots on overlap routes like EDI and ABZ, I can't see the EC stopping a BA deal. Like others I don't see VS coming up with any cash, and the notion of LH shelling out more money to get a BD/VS combination together is a non-starter. LH's other investments have been for carriers which are the market leaders in their home territory, and even a combination would still be too small to take on BA.

Piecemeal slot disposal of mainline is highly unlikely....too difficult to manage in a drawn out wind down and would leave LH with significant closure costs which it will not want to take. Better to offload for nothing and stop the constant cash outflow.

WW will be a problem to offload. Don't see why anyone would pay for it when the set up costs at 2 Uk airports would be immaterial even if they had no ops there already. I hope I'm wrong but I think close down is the most likely option here.
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