The EU-US Open Skies agreement has started a scrum for increasingly valuable slots at London Heathrow.
European Union and US officials signed the first stage of the Open Skies accord at the end of April, a little over a month after the breakthrough agreement was ratified by EU transport ministers. The deal opens up access to London Heathrow to all US carriers from 30 March 2008, but carriers can only take advantage if they can secure suitable slots at the congested airport.
Sources say the market price of a slot pair, particularly those which are feasible for transatlantic flights, has suddenly soared to about £20 million ($40 million). But carriers need more than just cash - they need friends in the right places, namely alliance partners that have extra slots up their sleeve.
Of the four US majors seeking Heathrow slots, Delta Air Lines appears the most confident its search will be successful. "We're going to be in Heathrow next year," says Delta vice-president of network planning Bob Cortelyou.
SkyTeam partner Air France, which is willing to reduce its high-frequency Heathrow-Paris Charles de Gaulle service, is the likely source of slots for Delta. Cortelyou says Delta expects "to be a major player at Heathrow" but adds it is too early to say how many flights it will be able to launch next spring and what its Gatwick operation will look like. Delta now serves Gatwick from Atlanta, New York JFK and Cincinnati.
Another SkyTeam carrier, Northwest Airlines, is expected to secure slots for Detroit and Minneapolis services from alliance partner KLM. Continental, which aims to launch Heathrow-Houston flights next year, is another carrier in the right alliance - SkyTeam.
Star Alliance carriers are not in such a good position to secure slots. US Airways aims to launch a Heathrow-Philadelphia service but asked if the Star carrier is confident it can secure slots, vice-president of scheduling and planning Andrew Nocella responds: "It's very iffy."
Star member bmi has the second largest slot allocation at Heathrow at 12% after BA's 41%, but it appears bmi does not have any spare slots for alliance partners. Earlier this year bmi sold 51 weekly slot pairs to rival BA and it needs to keep its remaining slots to support the launch of its own US services.
Bmi explains it had to sell the slots because its recent acquisition of former BA franchise partner British Mediterranean (BMed) was "entirely at the discretion of BA due to certain rights they held with the existing shareholders of BMed and rights under the franchise agreement". Bmi will take over all BMed routes in October and will continue to use BMed's slots in 2009. It says there are no plans to cut short-haul routes but this seems inevitable in order to free up enough slots to operate the former BMed routes after 2009 and new US services.
BA, Virgin Atlantic, American and United Airlines are currently the only carriers permitted to operate Heathrow-US flights. United, which in recent years has sold excess Heathrow slots, does not have any left for Star partners. American, if anything, needs more slots in order to move its Dallas/Ft Worth service from Gatwick, with the likely suitor being oneworld partner BA.
Nocella says it is especially difficult to secure slots at the times US carriers require - namely early morning landings and lunchtime takeoffs. He says some slots are also restricted to narrowbodies due to immigration constraints and gate access issues. "You need to meet all these tests and conditions. We're up for the challenge but it's an incredibly frustrating process," he says.
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Source: Airline Business
