p10 BA in-depth feb19 17/2/10 18:47 Page 10
in-depth
ttglive.com
Special Report: British Airways
After 12 years, British Airways has been given permission to unprofitable short-haul route. And it does not give
co-operate on transatlantic routes with American Airlines.
away the slot for free – it will be sold or leased.
But will it help the consumer? Gary Noakes reports
BA has got off lightly. Successive attempts
to forge a similar alliance since 1996 have
foundered because the two airlines were asked
Alliance gives BA
to give up as many as 16 slots.
However, the world and Heathrow has
changed since then. Regulators on both sides of
the Atlantic are keen for capacity to come out
of the market and for airlines to become finan-
cially stable through closer co-operation.
Atlantic advantage
Additionally, two years ago, the restriction
that permitted only two US and two UK carriers
to fly from Heathrow to the US was ended
under the EU-US open skies
deal, which meant that
Delta, Continental and US
S
andwiched between bad weather and approve the partnership, but he can Airways were allowed to fly
strike threats, the news that British go ahead in roughly two months even there for the first time.
Airways and American Airlines look if Brussels is still mulling it over. This worked to BA’s
set to be allowed joint operations BA has similar joint ventures with advantage as it seems to
across the Atlantic came as a rare piece of good Qantas on Australia routes and with have convinced regulators
cheer for BA chief executive Willie Walsh. Iberia on flights from the UK to that the combined threat
The US government has given provisional Madrid and Barcelona. The new deal of Skyteam’s Delta and
approval to the carriers, plus fellow oneworld will also embrace routes like Madrid-
“The DoT has
Continental, together with
members Finnair, Iberia and Miami, which Iberia and AA share. Star Alliance members
Royal Jordanian to The deal means BA will put its code
given BA and
United and US Airways,
combine operations on around 120 new destinations,
American the
makes BA and AA less dom-
on routes from while AA will do the same on more inant than they might seem.
Europe to the than 140. Iberia is the biggest winner,
ability to legally
US, Canada and with almost 200 new routes on which
collude on prices
Gangs of New York
Mexico. its code will appear. But on the most lucrative
Walsh has
and schedules”
route, Heathrow-New
not quite got Reasons to be cheerful
Sir Richard Branson
York, BA and AA are un-
the green Walsh will be smiling at the penalty questionably dominant.
light – the Eu- for these privileges – a forfeit of just four pairs BA flies 10 times a day and its partner four.
ropean Commis- of take-off and landing slots at Heathrow. Delta flies twice-daily and Continental will
sion must also To Virgin Atlantic’s disbelief, US regulators increase to five a day from October. Virgin
said that would ensure fair competition. Atlantic, which is not part of any alliance,
BA and AA must make these slots operates the route five times a day.
available to rivals for two new US BA would argue that under open skies, Delta
services, one unspecified and one or Virgin can increase frequencies or launch
to Boston, but even this is in BA’s new destinations. But in the current market
favour. Unless BA is told exactly no-one is scrambling to do so. BA’s rivals will
what slots to hand over, it can argue that once BA’s joint venture is in place,
drop or cut frequencies on an it will make even less sense to invest in more
frequencies or new routes.
BA/American alliance
Opponents have 45 days to appeal. Of all
of them, Virgin Atlantic president Sir Richard
What your customers will be able to do
Branson is most unhappy with the US Depart-
■ Earn and redeem frequent flyer points on
ment of Transport.
each other’s transatlantic flights
“The DoT has given BA and AA the ability to
■ Connect easier
legally collude on prices and schedules and
■ Benefit from more frequencies on key routes
capitalise on their already dominant position,”
he said.
What you won’t be able to do
Virgin is still protesting, but despite his pop-
■ Find a fare on British Airways that is cheaper
ularity and lobbying expertise, this looks like a
than American Airlines
battle with BA that for once, Branson has lost.
10 19.02.2010
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