Open skies is a done deal....
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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?
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?
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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.
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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.
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
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.
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
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Wake-up call for HMG. 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
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
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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...
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...
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... In time the US market will be opened up and they will end up flying east coast to west in the states.
KC135777
Paxing All Over The World
Count von Altibar
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.
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...
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.
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Congress and Open Skies
Feb 2007 - From the Congressional transportation committee:
Ownership issues were worked out but what was done regarding the EUs carbon trading scheme and Open Skies?
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.
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Competition - But Not In My Back Yard
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 !
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 !
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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.
The bidding war for bmi is about to begin and If BA don't throw their chips in they had better watch out.
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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?
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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.
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.
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Virgin sets its sights on rival BMI
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/mai...7/03/23/cnskie s23.xml
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/mai...7/03/23/cnskie s23.xml
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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.
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.
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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 !
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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.
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.
Oops pardon me
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Ryanair A380's
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
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
The bidding war for bmi is about to begin