British Airways has increased its share of take-off and landing slots at congested London Heathrow airport after acquiring some from United Airlines.
BA's deal with United to gain two peak time slot pairs at Heathrow means the airline has boosted its share of slots at the airport to 41%, an 11-year high. The lowest point it reached during this time was just under 37% in 1999.
Cash-strapped United, which is operating under Chapter 11 bankruptcy protection, took the unusual step of relinquishing prime Heathrow slots, partly to raise money and because the slots in question are not being used during its winter schedule. The deal is worth £12 million ($20 million) to United.
BA won the race to gain the slots in an auction, the traditional way in which slots are traded. It is technically a slot swap, as they cannot be directly traded, with BA giving United two slot pairs in return. However, in such deals the slots being transferred from the 'buyer' to the 'seller' are at inconvenient times and the selling airline tends to return them to the airport's slot pool.
United has in the past had up to 21 slot pairs at Heathrow but does not use them all during the winter. Previously it has allowed Star Alliance partners such as bmi or SAS to make use of the unneeded ones, but this time it opted to cash them in.
One of the slot pairs was used during the summer for United's daily London-New York Newark service, which has been cancelled from the beginning of the winter season, while the other was used on a 'tag' flight from London to Brussels. This is also not being flown this winter. United has performed tag flights to Brussels and Amsterdam for several years during the winter to ensure slots are not lost. Tag flights add a rotation onto a transatlantic service to one of these European cities.
The United deal is just the latest slot acquisition by BA at Heathrow. 'Over the last 18 months we have had a concerted effort to improve our overall slot position at Heathrow,' says the airline. It recently obtained eight daily slot pairs following an exchange with Swiss as part of its alliance with BA, while seven slot pairs were exchanged last year with SN Brussels Airlines.
BA has gained a handful of other slots in smaller deals with Adria Airways, Balkan Bulgarian Airlines, Lithuanian Airlines and Colombian carrier Avianca over the past couple of years.
BA stresses that while it would prefer a solution that sees extra runway capacity being allowed at Heathrow, for now it has no alternative but to buy slots in order to offer more services.
Even with recent deals, the airline still trails Air France, KLM and Lufthansa in terms of slot shares at home base hubs. BA notes that Lufthansa holds 54% of slots at Frankfurt; Air France 51% at Paris Charles de Gaulle; and KLM 51% at Amsterdam Schiphol.
Continental Airlines, which operates to London's Gatwick airport but is not allowed into Heathrow, has criticised the sale. 'Over the past few years, BA has ruthlessly strengthened its iron grip on Heathrow by purchasing the limited number of slots held by distressed carriers,' says the airline.
It worries that if it obtained the right to operate into Heathrow there would be no slots available for new entrants. Continental argues that US negotiators involved in talks with the European Union over a multilateral aviation deal should make Heathrow slots a top priority
MARK PILLING / LONDON
Source: Airline Business
