Originally Posted by
bmybaby81
If IAG is forced to give up slots I'm not sure how this will work. Will the bidding airline have to pay IAG for the slots or do they get them for free?
Typically how it works is this. The purpose of the slot release is to ensure competition on a given route. Therefore the slots are only usable for that route (let's say LHR-EDI). The bidding airline
gets the slots for free, on condition that they are used on the route in question. You can't take the slots and then turn around after a week and say "oh, we want to use them for LHR-JFK instead". The regulator may appoint a "monitoring trustee" (law firm or similar) to ensure the slots are used appropriately.
For a good example, see
the EC's judgement on the Lufthansa takeover of Brussels Airlines (PDF). It's a long document (but an example of the level of detail that typically goes into the analysis) but most relevant for your question are pages 118 onward, the commitments (= the proposed remedies). You'll see (section 439, page 120) that a new entrant gets to keep the slots ("grandathering rights") after a certain number of seasons, i.e. after that period, the slots can be used for alternative routes if the original plan isn't working out.
Note also (and this is relevant for IAG/bmi too) page 120 onwards also describes the other commitments, e.g. interlining/SPA provisions for connecting passengers.
I think this is a reasonable template of what we could expect as conditions for approval of the IAG/bmi deal.
(I should add as a postscript, though, that this document also shows the limits of the regulator's approach. They approved the LH/SN deal on the basis that they were confident that another carrier would enter the relevant competed routes (BRU-FRA, BRU-HAM, BRU-MUC in particular). You can read the document and see that they fully expected VLM and/or Croatia Airlines (!) to do so. Actual result (unless I missed something!): no market entry, no competition. The alternative is to get an upfront commitment from a new entrant before approving the deal, and that's fraught with its own problems (see OFT Air France/CityJet/VLM as an example).)
Hope this helps
C.