Originally Posted by
6chimes
They're after the scraps thrown at them by the regulators, which will be significantly cheaper than if they'd have set up a network. Everything they spend now is a cheaper alternative to buying the slots on the open market. They may well seek to operate a subsidised short haul domestic feeder, and keep a couple of mid haul routes. But that would be it. Way less than 50% of the slots.
6
I think you're right. The regulatory remedy will not be a generalised slot handback - as already stated, the combined IAG/bmi would have a lower share of slots in LHR than AF in CDG, LH in FRA, etc. I believe the remedy will be the surrender of slots to allow a new entrant to operate those routes which would otherwise turn into monopolies as a result of an IAG/bmi merger. The main ones are LHR-MAN and LHR-EDI, and perhaps a handful of mid-haul routes like LHR-CAI and LHR-DME. I could (just about) imagine VS deciding to pick up a couple of A320s to operate MAN and EDI, with a strong emphasis on feeder traffic. And the likes of DME as well? Why not? After all, IIRC, VS lost out to BD in the scarce capacity hearing a few years back for the right to fly to Moscow.
If doing the deal fast is important to LH, you can be sure that their lawyers are already deep in discussions with the competition authorities and have already made a pre-emptive offer of slot handbacks with a view to getting a fast green light from the regulators. It's worth giving up a couple more slots if it gets a heavily loss-making company off your hands a few months sooner.
C.