[Anonymous]

[VintageKrug]

Some excellent news yesterday, as the US DoT announced they would, in principle, approve the tie up while requiring only a handful of slots be surrendered by the carriers in exchange for anti-trust immunity.

Branson predictably furious, and I still have my own concerns about this from a monopoly perspective, but all in all this should help airlines cut costs.

Whether these savings will be passed on to consumers is anyone’s guess, but I think we know the answer to that one….and of course it is possible frequencies will be reduced to key US hubs.

My main concern is BA flights being swamped by AAdvantage members redeeming their millions of giveaway miles on superior BA products; let’s hope some inventory restrictions still persist in the same way Singapore Airlines guards its key route premium cabins for its out Frequent Flyers.

Still a way to go before fully approved, but a pat on the back for Willie Walsh’s persistence on this front.

http://www.ft.com/cms/s/0/f145ac00-18d2-11df-9b09-00144feab49a.html

[Binman62]

From a shareholder persperctive I am pleased and the predictable reaction from Sir Richard’s 49% SQ / (star alliance owned airline) shows that some competition to that alliance is at last on the scene.

But from a consumer angle I have grave concerns. When you see what QF/BA have doen this winter in terms of capacity cuts and fare increases it is hard to see how premium fares will benefit. The back end may well fall as a sop to regulators but it will be the profit making end that increases.

Share also your concerns about mileage redemption….

A curate’s egg perhaps?.

[continentalclub]

Everything that I’ve seen, heard and read about the proposed AA/BA/IB tie-up seems to make sense from a commercial, operational and shareholder point of view.

From the customer’s perspective, and of course time may prove me wrong, I strongly believe that most of the benefits will be positive. The Qantas JSA is a quite different construct, though it’s difficult to argue that it doesn’t bring more choice of product and routings to both UK and Australian passengers, especially when booking through the BA or QF websites.

If what I understand proves true, then the three airlines’ inventories will be opened to each of them and the through-ticketing and interlining opportunities will increase massively. As it is, BA is effectively ham-strung by AA only releasing certain fare buckets for codesharing, some of which are not combinable with the fare codes of connecting flights from the UK sold online. BA cannot currently sell non BA-codeshare AA flights on BA.com; if the tie-up goes through then they will.

Just this week, I tried to book LHR-SAN on ba.com, but the only options were either via DFW or ORD. As the travel class was World Traveller Plus, this meant that significant flying time would be in AA Economy, and the fares came out at between £1100 and £1400.

Expedia, however, routed far more sensibly on BA to LAX, then AA down to SAN on a 45 minute hop, for just £950.

The tie-up may not necessarily reduce fares, but it is highly likely that it will make the best fares and the best routes far easier for the majority of customers to find, I’d suggest. It will also make through-ticketing easier, reducing the need to split-ticket and affording the customer greater protection in case of irrops, baggage mishandling and misconnects.

Virgin Atlantic will of course be coming under some further pressure of its own this year, as I believe that four Heathrow slot pairs that it leased from United for a five year term in 2005 will be heading back to United.

Their return will help strengthen the *A presence/competition at Heathrow, as will the four additional slot pairs that the DoT is suggesting must be surrendered by AA/BA if the tie-up proceeds.

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