Open skies is a done deal.... [Archive]

Muizenberg

22nd Mar 2007, 13:04

I too work for BA, and hope the UK government has not given away the family silver. For years we have been put at a competitive disadvantage by not gaining anti-immunity trust with American (whereas LH/UA and KL/NW have). I hope the American and BA relationship can now be brought to the level of the UA/LH relationship with regard to code sharing across the Atlantic and full reciprocal participation in FFP's.

The first route BA will move will be the IAH to LHR...this is one of the top 10 most profitable for BA, and LGW will not be an option, especially once CO gain entry to LHR. Unfortunately, any route not contributing to the business will be axed from LHR or moved to LGW...can see expansion be shifted away from USA/India as these routes will be more saturated. Leisures routes will move to LGW (NAS, MRU), the moment AA can fly LHR-DFW (and BA can code share on it) LGW-DFW will be dropped. May also be some money to be made in selling slots (I'm sure BMI is rubbing their hands together at the prospect of this).

BA needs to think about new markets where US carriers will be afraid to fly, and markets where LH/KL/AF haven't entered yet...

I hope Virgin America does well, and shows the Yanks how to run a domestic airline, and WHAT customer service is...and that you CAN actually be polite to customers. The potential success of Virgin America and anti-immunity trust for AA/BA are the only advantage for UK carriers.

How does BMI think they can compete in the LHR-JFK market against AA/BA/VS when UA couldn't? BMI are so desperate to fly across the Atlantic...but WHY??

Railgun

22nd Mar 2007, 13:06

Its good that the market is now opened up but what chance is there of any carriers getting more or new slots into LHR at the moment?

Everyone thinks its great news for BMI but will any new flights from LHR be as successful as there Mumbai service....After all who are BMI to a US citizen or anyone outside of the EU?

Muizenberg

22nd Mar 2007, 13:13

BMI's only hope is that their flights will be UA/US/LH/SK code share flights. Markets they could operate would be LHR-DEN to feed UAL hub in DEN. Takeover the LHR-LAX from UA (as this is under scrutiny and not performing to the level UA would hope). UA has frequency on IAD/ORD and SFO and these along with DEN will be their priority come Open Skies to feed their US hubs. LHR can't be that lucrative for UA, as why else would they lease a slot to AC (old LHR-JFK), and have sold slot to BA (the old LHR-EWR in 2003)?

PAXboy

22nd Mar 2007, 13:27

MuizenbergBMI are so desperate to fly across the Atlantic...but WHY??I think it's one of those contests about sitting round the big table and seeing who can throw the largest set of keys on the table ... Sir M has certainly built up the airline fantastically well but if he now abandons the regional pax from MAN, just to be able to be at the cess pit of LHR, I don't think that his customers will thank him. Can he fund extra /ac and crews to keep those routes and operate more from LHR?

Without the third runway, there must be the risk of European slots being sacrificed to long haul? That could mean lots of yummy flights but highly limited flying connections into LHR. No good to arrive at LGW/LTN and then have to get across by land for your new flight that now goes from LHR!

However, it looks as if BA had correctly read the runes and their plan to abandon LGW will be seen to have been timely.

It is very amusing to see one part of the EU administration working diligently to have more flights to everywhere, whilst another part of the EU strives to cut back on flights. :p

Railgun

22nd Mar 2007, 13:30

Under the new deal, both British carriers will have to fight to keep their landing and take-off slots against wide-open competition from other European carriers.
Correct me if i am wrong but are they not VS's and BA's take off and landing slots so therefore there will be no fighting over them?

barry lloyd

22nd Mar 2007, 14:14

Muizenberg:
Your comment about the IAD-LHR is interesting. Orginally (back in the 70s), BA were offered the route but declined it. BCal took it up, along with some others, as part of a new agreement with the US, and operated it very successfully. When BA swallowed up BCal, they were still ambivalent about the service,(which at that time still operated into LGW), but then came the collapse of Communism, and every oilie in Texas wanted to fly to Moscow. The flight was then re-routed via LHR in order to connect with the LHR-SVO flight (as it then was), and the SVO flight moved from T1 to T4 for a better connection. I know this because although I am not in the oil business, I was a frequent traveller on both flights. Given the new agreement and now that the oil rush is now a trickle, they may consider re-routing it through LGW.
The only ones rubbing their hands are the US carriers, and it's not about LHR/LGW. Look further afield. The 27 countries of the EU with a population of +/- 500 million now with unrestricted access, and most with relatives in the US? It must a wet dream for a US carriers' planning department.
This will do more than anything else to rescue the US carriers from Chapter 11, and that's what it's all about. LHR/LGW, are bit players in this agreement.
The UK had its chance (Bermuda 1&2), but the talks went on forever and achieved nothing. We have been forced into this by Brussels, and it's our own fault.

antonovman

22nd Mar 2007, 14:31

"This will do more than anything else to rescue the US carriers from Chapter 11, and that's what it's all about. LHR/LGW, are bit players in this agreement.
The UK had its chance (Bermuda 1&2), but the talks went on forever and achieved nothing. We have been forced into this by Brussels, and it's our own fault."
The way i see it, once again the USA has got everything it wanted and we got nothing. LHR now opened up to the US bankrupt airlines, being protected and propped up by bankrupcy protection. They even will be allowed to fly within the EU. The UK has had to open up LHR to all and sundry, the only thing we had to negotiate with. We have been sold down the river.

haughtney1

22nd Mar 2007, 14:44

The UK has had to open up LHR to all and sundry, the only thing we had to negotiate with. We have been sold down the river.

Before ANYTHING can be opened up, slots are required....so its not so cut and dry.

Dan Air 87

22nd Mar 2007, 15:05

So, if BA moves its US services to LHR what will become of long haul out of LGW? Does this only mean there will only be short haul, some domestics and some flights to BGI etc? When will be BA clarify what will happen to their LGW operations??

bermudatriangle

22nd Mar 2007, 15:45

open skies takes away BA and Virgin virtual monopoly on LHR/US services.any LHR slot can now be used for transatlantic operation,rather than LHR/DUB or LHR/CDG for example.this opens up tremendous opportunities for non transatlantic airlines to operate new long haul routes to and from LHR.
to hear willie walsh spouting that this is not good for passengers is laughable.not good for BA or willie walsh.maybe time for a quick re-think on his strategy of abandoning many uk domestic and short european services by giving away Bacon to Flybe.all eggs in 1 heathrow basket may have been an option before,it is certainly looking very dodgy long term if this deal goes through as proposed.

Eirefly

22nd Mar 2007, 15:55

Yep Aer Lingus has just announced three new routes to Washington Dulles, Orlando and San Francisco. The Orlando route is long overdue.

This will hit Continental, Delta and American Airlines hard!

Good times!!

http://www.rte.ie/business/2007/0322/openskies.html?rss

bermudatriangle

22nd Mar 2007, 16:11

Muizenberg

22nd Mar 2007, 16:21

who knows...maybe this will be the re-birth of "the hub without the hub-bub" Mark III ?? for BA??

The SSK

22nd Mar 2007, 16:29

the big boys must be relieved ryanair and easy have no LHR slots.nevertheless,I am sure willie walsh is a very worried man.richard branson is already looking at operating across the pond from other european airports such as CDG.this is very bad news indeed for BA.

But right now there is no obstacle to Ryanair or Easy operating transatlantic from Stansted or Luton - Maxjet, Eos and Silverjet had no trouble getting the rights, did they?

The Heathrow 'money machine' exists because of an excess of demand over supply. That situation will continue, substantially, into the future.

bermudatriangle

22nd Mar 2007, 16:34

The SSK,very true,other airports have the capacity for more services.the pressure will come at LHR,where other carriers utilise short haul slots for transatlantic routes.that will increase competition substantially,especially in the premium cabins,where huge profits are currently being made.i am sure we will see fierce competition for the business traveller.this will hit BA very hard.

Ghengis Cant

22nd Mar 2007, 16:38

I have to say that this well and truly puts the writing on the wall for BA.

Sitting as fat cats on the monopoly of the LHR cash cow and running away from any competition in the regions, it is now extremely vulnerable.

I am sorry to say that those of us who have suffered BA's incompetence in the regions cannot but enjoy the discomfort that must surely be being felt by some at BA who have not a clue about the real competitive world into which they are now being projected.

Del Prado

22nd Mar 2007, 16:52

Don't worry about the lack of slots at Heathrow. When mixed mode comes in there'll be a 30% increase in capacity.:uhoh:

Gonzo

22nd Mar 2007, 17:11

Don't worry about the lack of slots at Heathrow. When mixed mode comes in there'll be a 30% increase in capacity.:uhoh:

HAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!

One struggles to think if one has heard of anything funnier!

haughtney1

22nd Mar 2007, 17:16

HAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!

One struggles to think if one has heard of anything funnier!

Well said G, I reckon more like 5% :8

The SSK

22nd Mar 2007, 17:19

I think the 30% refers to the increase in noise - from the Cranford residents' howls of protest.

PAXboy

22nd Mar 2007, 18:01

A 30% increase - and that assuredly means that there will also be a 30% increase in:

stand availability
tugs and their experienced drivers
fuelling vehicles
honey wagons
catering vans
luggage trains
car parking spaces for the extra staff and pax
:p

bermudatriangle

22nd Mar 2007, 18:06

great news for LGW,plenty of capacity for transatlantic operations.wonder if BA will have a rapid re-think about it's future viability ?? nice to know that heathrow will no longer be the only choice for a variety of UK-US flights.I will be delighted to avoid heathrow in future,it can't happen soon enough !!

llondel

22nd Mar 2007, 18:52

How about a few more brave souls flying to the US from Stansted? Ideal gateway to cheap flights into Europe and for those of us not resident in the extreme SE of England, easier to get to than LHR or LGW.

Barcli

22nd Mar 2007, 19:33

re slots at LHR - very very clever move of BMI to have just bought Bmed and 8 slots per day !!! cant wait - am opening a dollar account tomoro !!:) :)

bermudatriangle

22nd Mar 2007, 19:39

BMI securing the BMED slots,another blow to willie walsh and the inspired leadership team at WATERWORLD !!

Barcli

22nd Mar 2007, 19:43

must say WW looked pretty sick and p....ed off about it on the BBC news !!!:O

tristar500

22nd Mar 2007, 19:43

Oh dear, oh very dear...

What must Willie be thinking tonight? Just when he thought things couldnt get any worse... ''Open Skies''

Can anyone name 1 thing he has done, to enhance the image of the airline? However anyone can name at least 5 things hes done to tarnish the name of the airline!

Now, with everyman and his dog that owns an aircraft legally allowed to operate from LHR (any European airport) to any where in the US, where will BA make their money? Of course India, China and the Far East still make good returns but the US is the jewel in the crown.

More mergers then?

I cant wait to see scores of BA longhaul aircraft scattered about LHR - wherever there is a space to park them up!

Maybe now Mr Walsh, you will waken up and smell the clover. Retain the BA mainline staff in the regions, Use the Regional UK airports and try clawing back lost business to the likes of Continental, Delta, US Airways etc etc!!!
Its worth a try - now you really cant afford to ignore us...

EI-BED

22nd Mar 2007, 19:59

The European Council Conclusion paper from todays meeting 22 March 2007, indicates that the Open Skies agreement takes effect from 30 March 2008 and not 28 October 2007. The Commission was asked to secure agreement of the United States to confirm their agreement to reflect this;

http://ec.europa.eu/transport/air_portal/international/pillars/global_partners/doc/us/22_03_220_council_conclusions.pdf

As for Ireland they were the only country to reach an interim agreement with the US, this was reached in November 2005 between Ireland and the US, once an agreement between the EU and US was agreed, Irish Airlines will have access to three additional destinations, Aer Lingus have selected IAD, SFO and MCO, these three destinations can commence immediately. Irish airlines will have access to the full American market from 30 March 2008, when the full open skies agreement comes into place.

As per this agreement, the Shannon stop over will operate on a 1:3 basis with immediate effect and from April 2008 the stop over is no more.

Faulty

22nd Mar 2007, 20:48

>re slots at LHR - very very clever move of BMI to have just bought Bmed and 8 slots per day !!! cant wait - am >opening a dollar account tomorow !!

That's not quite correct. True, bmi bought Bmed with the existing franchise agreement continuing to October but after that the slots remain BA's.

sweeper

22nd Mar 2007, 20:55

what price now an aer lingus takeover? all those luverly heathrow slots......:ooh: :sad:

BMEDbus

22nd Mar 2007, 21:23

Faulty,

"bmi bought Bmed with the existing franchise agreement continuing to October but after that the slots remain BA's."

BMED owned their own LHR Slots. BMI has managed to buy a very sweet deal in deed. £30 million for 8 prime time long haul timed slots.

Bargin i'd say!!!!

I bet WW wishes he didn't turn down that first refusal now.

bermudatriangle

22nd Mar 2007, 21:44

BMEDbus...I bet the BA board are asking themselves why they appointed willie walsh as CEO......big decisions for BA to make in the very near future to try to minimise the damage this deal will inflict.do they have the right team in place to make those decisions?from recent experience i very much doubt it !!
this really is make or break for BA,no longer enjoying its lucrative LHR transatlantic franchise,they have to come up with the correct long term business model,or else it's all downhill and rapid !!

maxy101

22nd Mar 2007, 21:52

I wouldn't be at all surprised if the full merger of BA/AA and perhaps Iberia finally comes to fruition. I understand that the US government were objecting previously.I can also see some serious slot swapping occuring between partners within alliances to "lend" some to the American carriers. Unfortunately, it surely has to be to the detriment of the shorter routes,probably domestic routes as the fares seem to be dropping anyway due to the likes of the lo-co's. While competition for the Europeans flying to the US is increasing, and therefore fares will come down, it seems to me that the poor old Brit wanting to fly domestically is going to have less choice, and hence may find domestic fares going up.
As an aside, I also wonder how all this ties in with Labours policies on green aviation. Surely, this will increase the number of flights between the US and Europe? I thought we were all being taxed to reduce demand? Or perhaps the government don't want us to reduce our flying after all?

bermudatriangle

22nd Mar 2007, 21:57

Maxy101..with gordon brown picking up £40 for every longhaul passenger boarding a flight at UK airports,we all know the politicians want passenger numbers to increase.aviation is a cash cow for the UK government,generating more revenue year on year.bet the chancellor can't wait to see A380's lining up for 26L chasing each other across the pond.

120.4

22nd Mar 2007, 23:08

Mixed-Mode will deliver 10% at best, probably less. However, only about half of that will be available for growth - it was previously "accepted" that a significant proportion of the capacity increase must be used to improve robustness of service through reduced delays. Also, the government is now recognising that running Heathrow at the current scheduled rate is not sustainable if envirmonmental targets are to be met. Therefore, mixed-mode only delivers about 2 additional rotations per hour but not all of those will go to trans-Atlantic carriers.
30% of Heathrow's pax are inter-lining but why bother with Heathrow if you can go direct to/from your destination? In any event it seems probable that the European connections will diminish as slots are transferred to trans-Atlantic services and Heathrow's role as a worldwide hub will suffer significantly.
Wake-up call for HMG.:ugh: :ugh: If London is to continue to compete in the future it must be given the third runway now, with no dallying around. Paris and Amsterdam have ample runway capacity to take on all comers; it is there and waiting. Miss this opportunity and Heathrow can kiss its pre-eminent position goodbye.
.4

4468

22nd Mar 2007, 23:24

British Airways share price UP 6.5p on the day! (outperforming the market!)

Reports of the death of BA are greatly exaggerated!

:rolleyes:

GOLF_BRAVO_ZULU

22nd Mar 2007, 23:24

Wake-up call for HMG.:ugh: :ugh: If London is to continue to compete in the future it must be given the third runway now, with no dallying around. Paris and Amsterdam have ample runway capacity to take on all comers; it is there and waiting. Miss this opportunity and Heathrow can kiss its pre-eminent position goodbye

Unless the Brown, Cameron, Campbell green triad kills it with taxes anyway.

Count von Altibar

22nd Mar 2007, 23:57

In my view BA will ultimately benefit from the open skies deal. In time the US market will be opened up and they will end up flying east coast to west in the states. I think WW put up as good a performance as could be expected to protect BA's position as lets face it, the agreement was ultimately going to go through. His lobbying at the Parliamentary select committee was by far the best performance from any of the chief executives. I actually thought the Silverjet chap was pretty good as well.

Reference BMED, I think you'll find that BA are code-sharing with bmi from October when BMED are no more and become fully integrated with their new buyer. There was no way that BA would let the bmi/BMED deal go through without having a say in the outcome. bmi need BA to carry the pax onwards.

If anyone loses out of this I think it will be Virgin Atlantic. Unaligned with any major partners in the states it will be pretty lonely after next March. They have got a very strong brand though, unlike bmi. Interesting times ahead in UK aviation...

KC135777

23rd Mar 2007, 01:04

... In time the US market will be opened up and they will end up flying east coast to west in the states.

There will be a major US airline pilot revolt, possibly a SOS (suspension of service), if this were to occur. :=

KC135777

PAXboy

23rd Mar 2007, 01:49

Count von AltibarIf anyone loses out of this I think it will be Virgin Atlantic. Unaligned with any major partners in the states it will be pretty lonely after next March. They have got a very strong brand though, unlike bmi. Interesting times ahead in UK aviation...

See the thread in R&N about Virgin America.

U-turn on Virgin boosts ‘open skies’ hopes
By Doug Cameron in Chicago and Kevin Done in London
Published: March 20 2007 19:57 | Last updated: March 20 2007 23:30

US authorities on Tuesday reversed their opposition to plans by Sir Richard Branson’s Virgin Group to launch a domestic US carrier in a move that could soothe lingering European opposition to a new transatlantic aviation treaty.

The UK entrepreneur’s long-running efforts to launch San Francisco-based Virgin America had been caught in the political crossfire of efforts to reach a EU-US agreement.

vapilot2004

23rd Mar 2007, 01:54

Feb 2007 - From the Congressional transportation committee:
International Aviation. On November 18, 2005, the United States and the European Union (EU) reached agreement on the text of a first-stage comprehensive air transport agreement and related Memorandum of Consultations. If approved by the EU Transport Council, the agreement would replace existing bilateral agreements with the Member States, thus establishing Open Skies between the U.S. and the entire EU. Although not formally a part of the Open Skies agreement, the issue of foreign investment in U.S. air carriers became a pivotal issue to the discussions between the U.S. and the EU. There was strong, bipartisan opposition to a Department of Transportation (DOT) proposal to define evaluation criteria for determining “actual control” of foreign interests on U.S. airlines. In the face of this bipartisan, bicameral opposition, DOT withdrew the proposal on December 5, 2006. The EU has not yet decided whether to endorse the proposed Open Skies agreement without the change in foreign investment policy. The U.S. and EU are set to resume formal negotiations in February. In addition, the European Commission has developed a legislative proposal to extend its Emissions Trading Scheme to cover civil aviation. The Commission’s intent is to cover all flights departing to or from EU airports, including those of non-EU airlines. The U.S. has serious questions about such an initiative, including the underlying science, the potential for discriminatory impacts, and the legal practicability of a mandatory international system. The Subcommittee will be monitoring these important international aviation issues this session.

Ownership issues were worked out but what was done regarding the EUs carbon trading scheme and Open Skies?

Whalerider

23rd Mar 2007, 13:52

The above is, in my opinion, the views of U.S. authorities.
I notice on this forum most seem to think Open Skies a great deal. I have to say I strongly disagree !
Let us look at some historical aspects. In the past Pan-Am, TWA and Delta all operated intra European routes from a base at Frankfurt using 727s. Indeed in the 1980s the cheapest flights from LHR to FRA was on one of those U.S. carriers. Now, during that time were any European carriers permitted to operate within North America ? NO - not even from say New York to Toronto ! Do you think that with Open Skies that route will new be able to be operated by European carriers ? - NO
From LGW there are currently two UK carriers operating scheduled services to the U.S., (BA and Virgin) - yet from the same airport there are presently FIVE U.S. carriers (American, Continental, Delta, Northwest, US Awys) operating such services.

Looking at freight there is a virtual freedom of such services allowed to operate through Anchorage - EXCEPT for UK carriers ! Why ? Well from memory, this was a result of FedEx throwing its toys out of the pram when, about a decade ago it was refused permission by the UK authorities to have freedom to launch whatever services it wanted from Stansted.
Even though no UK freight carrier was allowed by the U.S. authorities to operate similar services, the UK compromised and said that FedEx could have freedom to launch whatever flights it wanted from Prestwick - where it already operated a daily service. The response from FedEx ? It pulled out of Prestwick completely as a protest - obviously hoping it could get its own way - and complained to U.S. authorities - hence the current restrictions on UK carriers operating through Anchorage.
No - I have to disagree with the bulk of posters so far - I think this open Skies will be a very bad move for Europe - though I hope I am proved wrong.
The U.S. has always been for competition - as long as it is not in its own back yard. Nothing I have seen convinces me of anything to the contrary.

Remember the years that Concorde was banned from the U.S. - if there was a Boeing supersonic transport available at the time do you really think this would have happened ?
As I say - I hope I am proved wrong - but history tells me otherwise !

BMEDbus

23rd Mar 2007, 14:36

I don't think BA are in a position to buy a stake in Iberia or AA now. They need to keep look closer to home. All of a sudden bmi are posing a great threat to BA. If Virgin or Lufthansa or even Emirates buy bmi then BA will be knocked down several steps of the ladder. Bishop must be bathing in gold right now.

The bidding war for bmi is about to begin and If BA don't throw their chips in they had better watch out.

Dan Air 87

23rd Mar 2007, 15:01

Still no good news for LGW though which is a pity. My concerns are how many airlines that serve LGW from the US (such as CO, DL and NW) will up sticks and base themselves at LHR instead?

FLCH

23rd Mar 2007, 15:08

Whalerider, didn't Iberia run a hub in Miami FL ending around 2004 ? I could be wrong but remember seeing several Iberia machines there, back then.

Sleeping Freight Dog

23rd Mar 2007, 16:25

Yes, Iberia ran a hub for Central America through MIA for many many
years. They served GUA, SJO, PTY, MGA etc with DC9s and then
Airbus. They change in U.S. Gov't regulations that required International
travellers to clear customs rather than remain in transit put the kibosh
on the IB mini hub. That and the requirement that all visitors have a
visa. Air France also had a mini hub to their Caribbean territories.

F2 Driver

23rd Mar 2007, 16:32

Virgin sets its sights on rival BMI
By Alistair Osborne, Business Editor
Last Updated: 3:36am GMT 23/03/2007
Sir Richard Branson's Virgin Atlantic said it was interested in acquiring rival airline BMI as analysts predicted a flurry of mergers in the wake of the ground-breaking "open skies" deal.
Paul Charles, Virgin Atlantic spokesman, said: "We have always said we are interested in BMI and we will continue to look at it." The pair had abortive merger talks in 2003.
Will Sir Richard Branson's Virgin get into a bidding war with BA?
BMI, which is majority owned by chairman Sir Michael Bishop, has emerged as the big winner from yesterday's agreement between the European Union and the United States because it owns almost 13pc of the take-off and landing slots at Heathrow - second only to British Airways with 41pc.
The landmark deal will allow any EU carrier to fly from anywhere within the 27 member states to any point in the US and vice versa.
As such it opens up Heathrow to new competitors, breaking the stranglehold of 1977's Bermuda II pact between Britain and the US. That allows only four airlines - BA, Virgin Atlantic, American Airlines and United Airlines - to fly between Heathrow and the US.
Sir Michael's airline owns 90 pairs of slots at Heathrow. Typically, when such slots are traded between airlines they fetch £5m-£20m each.
BMI is 30pc owned by German airline Lufthansa and 20pc by Scandinavian carrier SAS, with Sir Michael owning 50pc plus one share. When Lufthansa bought its initial 20pc stake in BMI for £91.4m in 1999, it gave Sir Michael a put option to sell his stake to the German airline for the same price as it paid for the original shares, valuing his holding at £229m.
Sir Michael has a right to exercise the option this year, but with the open skies deal lifting the value of BMI's slots at Heathrow, he would be expected to want more.
Mike Powell, an analyst at Dresdner Kleinwort, said: "This deal will create a bidding war for BMI between Virgin and BA. Michael Bishop has gone on about open skies because it puts up the value of those slots and of the company."
Sir Michael denied the airline was now a bid target. "I'm not actually because I'm a private company," he said. "I've no plans to change the shareholders. People always go on fishing trips but it's business as usual here."
He took issue with comments by BA chief executive Willie Walsh that the open skies agreement was "not a good deal" because EU carriers did not get access to the US's domestic market. "If BA shareholders were told it wanted to fly domestic flights in America they would head for the exit," Sir Michael said.
Mr Walsh maintained BA was interested in flying from New York to the West Coast but really wanted full-blown liberalisation, allowing EU carriers to acquire US rivals, rather than be restricted to the current 25pc of voting rights.
Analysts also predicted that Iberia, in which BA has a 10pc stake, could be taken over. BA shares rose 6½p to 526p.
Lufthansa finance director Stephan Gemkow said Iberia had been "going around and offering the company for sale. We'd be forsaking our duty if we didn't take a look at it".
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/03/23/cnskie s23.xml

Skylion

23rd Mar 2007, 16:33

The reality is that this is a very bad deal for UK Plc. It has been totally stuffed by the USA on the one hand and the other Europeans on the other. The deal is in fact far wider than all the headlines suggest. The US carriers get access to all intra European points,- ie they can fly LON-ROM etc AND all points in the Far East, S Asia, Middle East and Africa,- ie they can fly anywhere in the world from any European city including within the EU. The Europeans get nothing at all within the US and nothing of any value from the USA to other international points. Geography means that there aren't many places beyond the USA that make sense for European airlines anyway and even if there were the fact that US airports do not have proper international transfer or even transit facilities means that the product would be wholly unattractive anyway.
UK/US is 40% of trans Atlantic travel and nowhere else offers anything like the range of destinations or frequencies that LHR does anyway, so whereas it offers a great market for US and European carriers , the UK gets almost nothing from anybody in return. The promise to look again at the question of ownership of US airlines is not worth the paper it's written on and there is no way the first part of the deal could be wound back if the second phase doesn't happen.
Forget whether you like BA or not. The UK has been rolled over by a mix of US aggression, EU barely hidden agendas about undermining the UK and UK political naivety and inertia. BA should have seen the EU capitulation coming a good while ago and been far more awake to what it meant and vigorously lobbied against it in Brussells. It looks as if they were caught napping there and only realised what was about to happen a month or two ago and by that time the trap was set.

bermudatriangle

23rd Mar 2007, 16:53

Skylion,the US domestic market is a very competetive one.BA could not operate profitably in the US domestic market.the sour grapes from willie walsh is because, BA are losing the stranglehold on LHR/US services,BA's profitable routes.with incresed competition on these routes,the future for BA is not rosy !

The SSK

23rd Mar 2007, 17:06

Ditto, US airlines already have very extensive fifth freedom rights within and beyond the EU. With the exception of FedEx and UPS, they don't use them.

Rule number one in this business is don't venture outside your core market unless you want to risk getting badly burned. Only exception is if you have an extremely strong brand - like Virgin, Easy ... or FedEx and UPS.

What *can* be done under the agreement and what *will* be done are two very different things.

coopervane

23rd Mar 2007, 17:22

Well open skies might be just what O leary has been waiting for.

You can just imagine 1000 seat Y class A380's from LHR to JFK all for 99p return!

You may laugh but long haul is on the Ryanair agenda and I dont think it will be aimed at Business class!

Maybe you could stretch the 737-800 to cross the pond with some tip tanks and light weight pax!

Coop & Virgin Bear

Max Angle

23rd Mar 2007, 18:40

The bidding war for bmi is about to begin There will be no bidding war as bmi is still a privately controlled company not a PLC. Lufty and SAS own 49% with Sir M. owning the majority shareholding himself. Until he wants to sell the company it cannot be controlled by anyone else. Now that open skies looks like a reality he needs to put his money where his mouth is and announce a proper program of US flights or sell it to someone who will. Personally I hope someone will make him an offer he can't refuse for the mainline part of the company.

maxalt

23rd Mar 2007, 18:56

Rule number one in this business is don't venture outside your core market unless you want to risk getting badly burned.
You may laugh but long haul is on the Ryanair agenda
Is Ryanair gonna get burned?
This'll be fun.

Dan Air 87

23rd Mar 2007, 21:02

Not only Ryanair but can you imagine the spate of new LCC's for the trans atlantic market using every available Boeing & Airbus aircraft? It is just a matter of time before Ryanair, Easyjet et al announce some pretty hefty new a/c orders for the B737-900ER, B767 / A330/ A340 for these routes! I wonder how many pax Mr O Leary will be able to cram into a Boeing for these routes?

llondel

23rd Mar 2007, 21:10

I'd like to see the results of loading several hundred people into a widebody jet in a free-for-all for seat assignment with a 30 minute turnaround :-) (from a safe vantage point, of course...)

Skylion

23rd Mar 2007, 21:20

Bermudatriangle: The US domestic market has always been a red herring and as you say there would be utterly no point in European carriers entering it. However the dynamics of intra-Europe and Europe to the rest of the world are very different, particularly in the case of the high volume and least nationalistic UK market. BA would stand no chance on Paris-New York but AF or LH could make a fist of London- New York if they wanted to put the aircraft into it. UK to the rest of the world is potentially very lucrative even at a single daily frequency and US carriers could easily compete on say London- Bangkok.
As I said, it's a very one-sided deal and is about a lot more than just the trans Atlantic route. UK has given all, the US nothing.