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bmi's Death Knell Begins: BA Acquires Six Slot Pairs at LHR

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Tete_de_cuvee - 23/09/2011 13:25 BST

Walsh appears to have a preference for China -

though Walsh's rationale is in reality far more self-serving than UK serving as he would have readers believe.

UK Plc is already extensively exploiting Chinese relations. According to Chatham House, which regularly surveys China's investments worldwide, the UK is already the destination of about 40% of all Chinese FDI in Europe. the closest competitors are France and Germany with about 15% each.

Travellator - 23/09/2011 13:27 BST

Is a slot - time specific - if so that would influence the route options to some degree ?

Bucksnet - 23/09/2011 13:31 BST

BA would have lots of CLT feed at the London end. MSY is a non starter as it's mainly low yield.

Scandinavian - 23/09/2011 13:35 BST

Side issue but...

Maybe rumoured LGW long-haul expansion in S12 did not happen since BA need the aircraft at LHR to expand with new slots.

Hippocampus - 23/09/2011 13:47 BST

Travellator - Yes, the slots are time specific but BA can easily juggle its schedules to accommodate new routes.

- 23/09/2011 13:48 BST

Bucksnet there is a lot of *A loyalty around CLT (Corporate UAL and US deals). I agree on MSY for now. My money would be on ICN (Seoul) I think. growing market and Aisana is *A and Korean Air is SKy Team.

FlightDoctor - 23/09/2011 14:19 BST

Does anyone have thoughts on the urgency of redeeming BMI Miles? I'm a Gold DC member with 200K miles and the thought of them all possibly going down the drain is not great!

Bucksnet - 23/09/2011 14:33 BST

BA has a lot of loyalty around LHR Rich, plus connections from all over Europe and further afield. AA codeshare will help also.

- 23/09/2011 14:42 BST

Bucksnet, BA have strong Brand Equity in UK and Europe and strong Corporate client base in UK. Just making the point UAL have been very effective at using Global Services and corporate pricing to build corporate loyalty. Corporate travel policy that favors UAL and *A and the fact that AA is based at RDU with just some AE into CLT limits the US based traffic opportunity. Let's see, I think the Far East is probably bigger opportunity for slot allocation and equipment usage.

VintageKrug - 23/09/2011 14:52 BST

It’s hard to make a Business Case for any new US destination vs. one in China/India especially the obvious government focus on these expanding markets. Having said that, we did get LAS, but this is a combination of high yield (it’s one of the most expensive US destinations to fly to) and Mixed Fleet lowering costs, plus a good balance of premium leisure and corporate/conference traffic.

Seoul ICN does seem like a nice idea, but I think there are plenty of places in mainland China which would work well, especially for a smaller 767 operation to launch the route, freeing up increased capacity on US routes currently served with 767s.

I’m still flying the flag for Fort Lauderdale FLL. Similar to LAS, with MF costs, premium cruise travel and corporates working in South Florida but wanting to avoid the hellhole of MIA it becomes all the more credible, especially if MIA is reduced a few services per week.

I can’t see the analysts going for Charlotte especially with both BoA’s and Wells Fargo/Wachovia’s woes still not fully played out IMHO.

yahoo1000 - 23/09/2011 15:17 BST

The 6 slots will only be leaving Bmi at the beginning of 2012.
I guess to be used for the new BA summer schedule.

Hippocampus - 23/09/2011 15:42 BST

In time, I still think there will be more destinations to the US, possibly nit until the 787s arrive.

- 23/09/2011 15:45 BST

Hippocampus do you think the 787's will be used to extend the non LHR US network such Manchester, Glasgow and Birmingham?

Scandinavian - 23/09/2011 15:54 BST

I doubt we will ever see BA flying new long-haul or intra European routes from the UK regions. BA's focus is now traffic to and from London. Opening new BA long-haul routes from the regions would incur extra operational costs (technical, crew etc) since they don't have the infrastructure in place at these airports anymore.

On the other hand we might see increased AA and IB services to and from the regions serving Madrid and the US hubs in the future. Surely that would be more likely?

- 23/09/2011 16:33 BST

From waht I see from AA it is distinct possibility though I see ORD-BRU has gone, some JFK-LHR flights no longer work 7 days and even in Jan LAX-LHR is not running every day. So may be a while before the economy permits service expansion. I like the idea of Long Haul config for Madrid services for Lat Am connection and think we might see Club World 767 doing Manchester or Glasgow to Madrid with a pattern that allows base to stay as LHR.

pixelmeister - 23/09/2011 17:22 BST

Um... FT has a view, however, there are a number of things that IAG would need to consider in any deal to buy EI. OK so there's the LHR slots, which are pretty useful, but they would need to shed some just to appease any competition commission. Next is the price of buying out Ryanair's 30% stakeholding - the airline has said it would sell, but the price hasn't been mentioned. Finally, there's a small matter of the pension fund, which is wrapped up with two other organisations. The BA pension fund is no barrel of laughs, there have been those who referred to the airline as a pension fund with wings, adding on a further liability may not be prudent. The EI pension deficit currently sits at over €500 million. Can't see anyone - even IAG - wanting to acquire EI until that deficit is addressed.

Scandinavian - 23/09/2011 18:12 BST

I think that the Irish government would put in some type of clause to safeguard Irish services to and from LHR should BA eventually purchase the Irish government and Ryanair's shares. Despite good connections to and from FRA, CDG and AMS - good LHR links are seen as vital to the Irish economy. There was a furore about three years ago when Aer Lingus closed the SNN-LHR link to use the slots to and from Belfast. The government did not step in at the time but Aer Lingus has since reopened the SNN route. The DUB-LHR route will always warrant a frequent service given the level of demand (EI and BD currently have about 20 return trips a day) - therefore the question is how many slots could be removed from this route and allocated elsewhere.

Should bmi disappear as a going concern then BA or BA in conjunction with Aer Lingus would have to ensure that BFS is also served from London. The BFS-LHR route is also vital for the Northern Irish economy, especially since BFS doesn't have any KL, LH or AF services to their respective hubs.

Transferring from Ireland to BA at T5 is cumbersome with long minimum connection times since BD and EI use the Irish wing of Terminal 1 (the most appalling part for LHR by a long shot). Much depends on what happens with EI but a closer relationship to BA should involve Ireland flights moving to T3 at the least, if not to T5 itself...

LondonCity - 23/09/2011 20:28 BST

As VK notes, there are a number of secondary cities in mainland China which BA could serve. These cities are already receiving attention from AF, LH and KL along with the Gulf-based carriers.

ICN is a difficult one because it's a Skyteam/Star hub and so BA would lack the onward transfer traffic to N China, Japan and Australia/NZ which the likes of KE and OZ can tap.

- 23/09/2011 20:58 BST

LondonCity, I think the big problem for One World is the lack of a PRC Carrier (other than CX which is a special admin area and very Hong Kong centric.). Sky Team is by far the best placed alliance with reference to PRC adn Star Alliance has a reasonable representation too.Given the size of the market and the current growth rates maybe a Chinese JV is where Wee Willie should be looking (and accodring to some posters indeed he is).

LeTigre - 23/09/2011 21:35 BST

As a British person working both for a Chinese company and requiring trips to China to maintain language accuracy, I can testify to the fact that airline links directly to China are a major inconvenience for many. To get to Chengdu/Guangzhou/Wuhan/Fuzhou/Taipei, all cities with populations of millions rather than hundreds of thousands, generally requires around 2 stops each way at the moment, or 1 stop is one is willing to travel with the below par Chinese carriers whose home hubs are somewhat primitive, not necessarily in terms of facilities but certainly in terms of reliability and delays. Considering the amount of foreign students, international workers, tourists and (dare I say it) asylum seekers who dream of visiting Britain and the large number who do actually arrive, I am surprised to see BA not prioritising potentially profitable routes over short haul/leisure flights. I heard a while back that China Southern is considering deploying A380s on a route to London that they have yet to arrange, so at least they are clear on the demand. Now if only Hainan Airlines would join oneworld...perhaps one new service could be Haikou!

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