BA ready to bid for BMI to expand at Heathrow
Here's a scenario for you to consider. BA is unlikely to be allowed to acquire BMI on competition grounds. So BA says right, we are going to pull out of domestic routes, we need the slots for Europe & long haul. The regions are in uproar. BA replies that it is very happy to interline and codeshare with BMI on Aberdeen, Edinburgh, Manchester, etc. Most BMI staff are still employed, BA no longer have regional crew bases and outsource handling so no big issues for its staff. As they are pulling off domestic routes there is no competition they might as well acquire BMI so that it stays in line.
The uproar from the regions might offset competition issues.
Of course there are issues. BA will need the extra slots gradually over a long period time - but it can always "babysit" some by using small aircraft on secondary European. The biggest danger would be for BA to pull off domestic without acquiring BMI which at some stage gets into bed with Branson.
Perhaps as a sweetener VS & other operators be given a block of seats on BMI domestic flights which would encourage competition (how does that fit into UK & EU competition policy)?
Thoughts anyone?
The uproar from the regions might offset competition issues.
Of course there are issues. BA will need the extra slots gradually over a long period time - but it can always "babysit" some by using small aircraft on secondary European. The biggest danger would be for BA to pull off domestic without acquiring BMI which at some stage gets into bed with Branson.
Perhaps as a sweetener VS & other operators be given a block of seats on BMI domestic flights which would encourage competition (how does that fit into UK & EU competition policy)?
Thoughts anyone?
While, on the face of it, purchasing BMI, or even Aer Lingus for it's LHR slots might sound attractive to another airline, consider this;
What happens if the UK Government decides, "Soddit, there's a recession on and we need more people through our airports". How do they quickly expand capacity at Heathrow? Easy, create something from nothing .... open up the 23:00 - 06:00 period to full ops. No need for a new runway or other expensive infrastructure. OK, plenty of disgruntled locals, but what are they going to do ... riot?
How many new slot pairing would opening up to full 24x7 ops create? What would that do to the price/value of the existing ones?
JAS
What happens if the UK Government decides, "Soddit, there's a recession on and we need more people through our airports". How do they quickly expand capacity at Heathrow? Easy, create something from nothing .... open up the 23:00 - 06:00 period to full ops. No need for a new runway or other expensive infrastructure. OK, plenty of disgruntled locals, but what are they going to do ... riot?
How many new slot pairing would opening up to full 24x7 ops create? What would that do to the price/value of the existing ones?
JAS
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I don't see why IAG would want to buy BMI mainline. It needs slots at LHR for BA to expand. BA has gone through 10 years of cost cutting solving a pensions issue twice, introducing new rostering and conditions and in general simplifying it's business.
Why would it add a BMI as a loss maker and increase complexity that has been solved in BA? It would be far simpler to buy slots or let BMI contact on it's own freeing slots and making skilled crews available to recruit.
Lets face it other than BA, who else would want that volume of slots at LHR? Virgin hasn't got the money. I would expect a few foriegn airlines interested in a few slots but not the number that BMI has. The UK isn't large enough for 3 mainline carriers at LHR, plus all of the low cost short haul across UK. BMI are trying to compete with BA on niche medium haul and both BA and Easyjet on London - Europe. Unfortunately for some great people at BMI, the market has probably moved on.
Why would it add a BMI as a loss maker and increase complexity that has been solved in BA? It would be far simpler to buy slots or let BMI contact on it's own freeing slots and making skilled crews available to recruit.
Lets face it other than BA, who else would want that volume of slots at LHR? Virgin hasn't got the money. I would expect a few foriegn airlines interested in a few slots but not the number that BMI has. The UK isn't large enough for 3 mainline carriers at LHR, plus all of the low cost short haul across UK. BMI are trying to compete with BA on niche medium haul and both BA and Easyjet on London - Europe. Unfortunately for some great people at BMI, the market has probably moved on.
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It does need aircraft and crews, but that is only a problem if everything is done in one go. IAG (and BA) have lots of options available to them:
1) 777 deliveries - 3 coming soon.
2) 747 returning from the desert - I think there are 2 more still parked up.
3) 787 deliveries starting 2013.
4) 380 deliveries starting 2013.
5) Defer 767 withdrawls due when 787's arrive.
6) Defer 747 withdrawls due when 380's arrive.
7) Juggle routes and a/c with LGW.
8) Use more IB aircraft on London - Spain.
This could be really interesting. Remember you also only have to use slots 80% of time to retain them so with some juggling of schedules and a/c around shorthaul you can spread them out.
1) 777 deliveries - 3 coming soon.
2) 747 returning from the desert - I think there are 2 more still parked up.
3) 787 deliveries starting 2013.
4) 380 deliveries starting 2013.
5) Defer 767 withdrawls due when 787's arrive.
6) Defer 747 withdrawls due when 380's arrive.
7) Juggle routes and a/c with LGW.
8) Use more IB aircraft on London - Spain.
This could be really interesting. Remember you also only have to use slots 80% of time to retain them so with some juggling of schedules and a/c around shorthaul you can spread them out.
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Just a Spotter.....
That would take quite a few years lead time, and I'm only thinking about the extra Air Traffic Control staff that would need to be employed. An extra 20 or so controllers, another 5 Lighting Panel Operators and another 5 Assistants. Training time for an ATCO is about 3 years from scratch, worst case a 50 % success rate (hopefully better than that), so 40 taken on, training capacity at LHR is about 10-15 trainees at a time, so you'd be looking at 4 years, maybe 6 in reality with wastage/retirements/resignations etc.
And that's only the ATC staff, there would be a whole load more issues for BAA Airside Ops etc. Granted, we in ATC perhaps have the longest lead time.
The night jet ban allows the airport to do all of its routine maintenance in that period. On most nights we close off more than half the taxiways for repairs and checks, as well as one of our runways. I'd hate to think about that with more traffic around!
What happens if the UK Government decides, "Soddit, there's a recession on and we need more people through our airports". How do they quickly expand capacity at Heathrow? Easy, create something from nothing .... open up the 23:00 - 06:00 period to full ops. No need for a new runway or other expensive infrastructure. OK, plenty of disgruntled locals, but what are they going to do ... riot?
How many new slot pairing would opening up to full 24x7 ops create? What would that do to the price/value of the existing ones?
How many new slot pairing would opening up to full 24x7 ops create? What would that do to the price/value of the existing ones?
And that's only the ATC staff, there would be a whole load more issues for BAA Airside Ops etc. Granted, we in ATC perhaps have the longest lead time.
The night jet ban allows the airport to do all of its routine maintenance in that period. On most nights we close off more than half the taxiways for repairs and checks, as well as one of our runways. I'd hate to think about that with more traffic around!
