Open Skies

[yachtno1]

I think we've got the Irish slant on this "Open Skies" loud and clear!

[D O Guerrero]

Now it all makes sense!
Wannabe makes some excellent points, although no-one seems to be giving him a very straight answer.

[en2r]

I don't mean to be rude but the whole world doesn't revolve around Heathrow. Most EU countries want Open Skies for their own reasons, and very few just want to get access to Heathrow. Here in Ireland we want Open Skies to get rid of the ludicrous Shannon stopover which means that for every two flights that leave an Irish airport, one flight must make a stopover in Shannon. We just want to get rid of this, we don't care about Heathrow.

[MarkD]

SNN is a mess entirely of Ireland's making - it's not so long ago when Open Skies was opposed by Them In Charge since it would kill SNN restrictions but now that an EU wide deal is needed to vary SNN restrictions they are all for it.

It's hilarious to hear Clare pols talk up the fact that every time SNN stop has been liberalised pax numbers increased - the same pols that refused to accept this right up until the 3:1 deal was done and the writing on the wall.

[D O Guerrero]

So as I see it, we in the UK should just roll over and let everybody else have it their way?
Just so I understand..

DO

[yachtno1]

From an Irish perspective, that does seem to be the case DOG...

[akerosid]

I wouldn't put it quite like that; the UK is the only country which seems to want these concessions, while every other country wants a deal, so it's not Ireland alone they'd be helping (although that would be enough! ).

Anyway, the EU Commissioner said yesterday that this O/S deal is only Phase I of Open Skies, with another part of it to start in 2010. How the mechanics of this will work, I'm not sure. The EU has threatened to back out of the whole O/S deal if the Americans don't give concessions; like that's going to happen ... a textbook example of cutting off one's nose to spite one's face.

The Transport Sec'y, Douglas Alexander, said yesterday before a Commons cttee that the UK is likely to support the deal, given that rejecting it would leave the UK isolated. He said that the benefits of the deal had to be looked at in a wider context, not just on the basis of LHR alone.

http://politics.guardian.co.uk/econo...033169,00.html

[Ancient Observer]

There is NO advantage

One intelligent person has been consistently asking what the advantage is of this "deal" for UK plc.
Quite simply, there is no positive advantage, and lots of downside for UK plc.
The useless bureaucrats in Brussels have been out-thought and out-negotiated by the USA. USA have moved on very little, whilst Europe have given up the only bargainning chip that the USA ever wanted.
USA will never return to the table - they've got all they want.
That is plain daft. (I have no connection with BA/Virgin - but I know a lot about negotiations, and the thought of the Officials conceding for no reason annoys me.)

[MarkD]

Ancient - UK airlines would be able to base US ops out of continental airports - assuming they could get slots at somewhere like CDG, of course I'm sure some people were wondering what EU open skies would bring the UK and the answer is one of the cheapest air travel environments in the world - if you forget the taxes!

As for the UK traveller, airlines like BD and EI could use LHR slots to do US ops and bring down the prices for UK travellers, or at least for BA/VS to continue to justify any premium. I don't see it happening myself but who can say what some airlines will at least try.

[D O Guerrero]

Thanks Mark - A sensible answer at last.
I still don't like it though! Basically we're getting into something on completely unequal terms. Both parties need each other, but we're prepared to let the US to have more just because we're worried they might pull out. Well it strikes me that we need them just as much as they need us. I don't think it is usually justified in any negotiations to obtain something at any price.
I think that the principle objection should be that EU companies will not be able to control US companies. Whilst this might not matter to countries like Ireland or Portugal or wherever, it matters to the UK as we have a strong history of overseas investment. The whole thing stinks of grotesquely one-sided protectionism and I hope that our veto is deployed in the absence of a fair deal.
I do think most people would welcome the genuinely "open-skies' aspect of the deal.

[840]

I wouldn't say OpenSkies has no benefit to the UK. It is likely to have a similar effect to the EU-wide Open Skies deal, with plenty of new routes for regional airports and perhaps Stansted and Luton, but with airlines who have a strategy based around Heathrow operations suffering.

[BCALBOY]

Already have Open Skies outside of LON , so this deal won-t add anything for Regions....if anything may reduce Regional services as carriers will
redploy resources to LON if they can get the slots.
BMI ,FOR E.G , have only developed LHL from MAN because they ordered LHL a/c in anticipation of a deal and when it didn-t happen they had to find something to do with the aircraft .
Also all carriers are going to want to m ove their LGW-NATL services to LHR which will be negative for LGW and in order to get slots at LHR carriers aill be buying slots from SHL operaters @ LHR , so a number of secondary SHL destinations @ LHR will lose their services ....places like MME , HAJ , EIN , RTM ,STR ,some of ex-BMED destinations

[akerosid]

UK seeks one year delay for LHR

The UK is looking for a one year delay to the Open Skies deal, before new operators enter the LHR market. Can't think why any more time is necessary, but if it's just a year, I guess they'll agree to it, if the alternative is the UK vetoing the deal.

I would imagine a number of unpleasant expletives coming from bmi HQ, but again, they mightn't be affected that much, if they won't be able to get any new aircraft by October anyway.

With LHR moving to mixed mode operations around 2008-9, the US might accept this if a quid quo pro is US carriers being allocated a certain proportion of the new slots arising from this?

http://investing.reuters.co.uk/news/...N-UPDATE-3.XML

[Skipness One Echo]

Heathrow mixed more is surrely only a proposal at the minute or have I done a Rip Van Winkle again?

[Ancient Observer]

Mixed mode

Mixed mode remains a very live project, with the DfT pushing BAA to make it happen, and if it can be done safely - CAA must be on the case by now - then the extra slots will be sold. Who gets the money - why, Gordon Brown, of course! The Treasury are after the income from the sale of the slots. That is why it is being pursued with vigour. Dear Sir Michael won't get the money. Anyway, he's sold his BMed slots to BA.

[bmi expat]

LHR slots

Ancient observer, new slots at LHR are not sold, that is illegal. When slots become available, they can be applied for by any carrier but new entrants are given preference.

As for bmi selling the BMED slots back to BA, where on earth did you hear that from, do you have a source to back that up?

[akerosid]

T minus 4 days ...

Just a few days left and the British govt is under pressure from both sides.

The Sunday Times reports that TB will be talking to GB to try and wrangle some concessions, including a 5 month delay in increased access to LHR. There is expected to be a sympathetic reaction to that, although Britain is also expected to push for another concession, whereby talks with the US on increased domestic access must start within 60 days and conclude within a certain, set timeframe, or else the whole deal falls through. Since the UK is the only country looking for this access, this is unlikely to get much of a hearing.

There will be a lot of talking next week, but it is now expected that a deal will be done.

BA is planning to move ATL, IAH and DFW routes to LHR (although it probably won't be able to do this before LHR is open to more US carriers) and Virgin is looking at route from other European countries.

http://www.telegraph.co.uk/money/mai...8/cnopen18.xml

[BCALBOY]

Would like to stimulate some discussion on what will happen if/when EU agrees to deal with US.

Carrier reaction ( my thoughts).......

AA - move DFW,RDU to LHR ...poss new routes to SFO,SEA,IAD or will they keep presence @ LGw...1 DFW ...RDU ?

DL - priority JFK ( need 3 or 4 to compete ) plus hometown ATL....maybe leave CVG and 1ATL; @ LGW .

CO - PRIORITY EWR ( again 3 or 4 /day ) plus IAH......will they keep 1 x EWR @ LGW plus seasonal Cle.

US - wud want to move whole OP to LHR ...would they add PHX to PHL/CLT.

NW - wud want whole op to LHR ....would they add SEA to MSP/DTT.

UA- LHR/DEN ? ( Think they-ve already tried BOS/MIA AND PULLED).

VS- LHR/LAS ?

BA- ATL/DFW/IAH ( already reported in press) wud they incr SEA frequency to protect or move BWI/DTT to LGW or pull to provide slots for others ?

BD Which routes make sense...JFK wud need 3-4/day ...which needs 3-4 a/c plus big revamp of their business product....LAS ?.....ORD..what will UA think abt that ? Will they pull MAN LHL to release the a/c...think they only started MAN as they had ordered a/c in anticipation of LHR opening up and it didn-t !!


Where will the slots come from in short-term ?

Skyteam....wud KL pull or move EIN/RTM to LCT to help DL/CO/NW ? Cant see AF/KL reducing AMS/CDG.

OneWorld....Cant see BA helping anyone other than themselves.....will they transfer to LGW...e.g. MRU ,BWI,DTW or reduce Domestic Freq further or move some very shorthaul to LCY or pull routes like STR or get GB slots to AGP/RAK/CMN or have they already bought BMED slots from BD ??

STAR...WILL BD help anyone other than themselves.....PMI/VCE/NAP/HAJ/INV/JER/MME/ABZ ??
Would LH help UA by say pulling CGN ??

Any other carriers willing to deal and move to LGW or LCY....AirJamaica, AIR Seychelles , Bangladesh Biman, PIA , LUXAIR , CZECH ??


A bit long but hope it stimulates some discussion

[akerosid]

It's certainly going to be a significant shake-up, so it's going to be interesting to speculate on what might happen.

For a start, TB is going to be talking to GB tomorrow, to discuss Open Skies issues. The UK is looking for a five month delay (which is expected to be granted, because few airlines will probably want to start new routes through the Winter). The UK is also expected to seek other concessions, which are unlikely to be granted ...

http://news.airwise.com/story/view/1174245450.html

What can the UK get out of this? Well, apart from the delay not a lot and even for that, the Americans will want something in exchange; I still think that some movement on mixed mode operations will be sought. If the US carriers are being charged £20-30m per slot, while bmi can just axe some LHR-MAN/EDI/GLA flights, then that's not going to go down too well. If bmi can add, say, six flights all at once, whereas US carriers can barely add one or two, then I can see some tension in transatlantic relationships.

I would expect that BA would find things easier, because it has more slots to axe; LHR-MAN flights would be cut back, plus frequencies on others cut down; however, this wouldn't be allowed to happen until US carriers have more access, so not before next May at the earliest. I wouldn't expect them to be able to add IAH and ATL until CO and DL, respectively, get LHR access.

Of the US carriers, I see American having the biggest benefit, since they can transfer DFW and RDU wholesale; indeed, I could see AA being the first US carrier to pull out of LGW altogether. DL and CO will too, once they have sufficient LHR slots. CO would probably want four at minimum - two each to IAH and EWR; CLE would probably be dumped.

DL would want about six, two each to ATL, CVG and JFK - again, not cheap for an airline in Ch 11.

Of course, all of this could change if there are mergers in the US.

I still can't see EU carriers wanting to fly LHR-US; indeed, I suspect VS's comments about flying Europe-US are intended as something of a threat; i.e. saying to AF/LH that "if you fly from our airport, we'll fly from yours".

A lot of airlines will be under pressure to sell LHR slots, but I still think that there will be a considerable amount of pressure on the UK govt (from the US govt) to bring Mixed Mode operations forward and for US carriers to get a significant proportion of these. I would expect that there will be an agreement for a "phasing in" of new LHR-US flights, starting next May; this would be to ensure (as suggested above) that US carriers aren't disadvantaged in the manner in which new routes are added.

As for next Thursday, it would surprise me if the UK govt were not told in no uncertain terms by the US administration what will happen if a veto is used. I would expect an immediate revocation of Bermuda 2, subject to whatever notice period is applicable.

[Flightrider]

I would be very surprised if AA moved RDU up to Heathrow. The main corporate customer on this who keeps the route afloat is SmithKline, travelling between their UK HQ in Crawley and their American set-up. Moving it to LHR probably won't make a fraction of a difference to the route's performance so why use a scarce set of LHR slots if it isn't going to bring any change in profitability?

There are a few other factors like this behind individual routes which might not make it absolutely clear-cut as to who will do what.

It is probably of more merit to speculate where people will get their LHR slots from. If you have an idea of the quantity of Heathrow slots on which the likes of Northwest, Delta, American, US Airways and Continental can lay their hands, then you can start to take some educated guesses as to what they will do. USAirways is the interesting one, since it doesn't have an obvious alliance partner likely to sell slots to it.

London City could get busier still with all of the extra flag-carriers' flights to Rotterdam, Eindhoven, Luxembourg and Paris.