Virgin Atlantic Secures All LHR Slots

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This topic contains 39 replies, has 23 voices, and was last updated by  SimonS1 18 Dec 2012
at 17:35
.

Viewing 15 posts - 16 through 30 (of 40 total)

  • excessbaggage
    Participant

    @cityprofessional – Virgin Express was part of the Virgin Group until sold to SN Brussels, so a relevant point from @AnthonyDunn I feel.


    cityprofessional
    Participant

    Yes Virgin Express was part of the Virgin Group, but it was a LCC based in Belgium, which used Sabena’s slots to fly to LHR. It had no affiliation or feed to Virgin Atlantic, which now wants to fly to EDI, MAN and ABZ . A bit like how Virgin Australia and Virgin America have few commercial links to Virgin Atlantic

    The point remains though – it’s odd how Virgin has had plenty of slots at Heathrow for the last 20 years and only now has decided that it desperately wants to fly short haul…


    JohnHarper
    Participant

    I can’t see VS sustaining short haul services from LHR.

    Up until now they had BD code shares so had no need of their own services but if we are to believe the publicity, BD were not making nay money on domestic services.

    VS will have to come along with a really spectacular offering to beat BA and make money. It has of course been done before in a different climate during the 1980’s. The concept which I remember well was called Diamond Service…

    Things do go full circle sometimes.


    excessbaggage
    Participant

    I guess the point i’m making is that Virgin Express was fully-owned by the Virgin Group, so they had the opportunity with that carrier to see how short-haul flying worked, both logistically and from a revenue point of view, on flights to and from Heathrow, among others. Granted in very different times to now though.

    Virgin America is only 25% owned by the Virgin Group (and I think that’s the same for Virgin Australia), and they are operating in completely different markets.


    LeTigre
    Participant

    Again, I certainly did NOT say that Virgin are not into UK short haul for the long term. Besides, by the time HS2/3/4 are built there probably won’t be a market anyway.

    A couple of things:
    -I seem to recall CAPA saying that the slots couldn’t change to random destinations for five years, searching now for the article
    -Hopefully, Virgin Atlantic are consulting with the American and Australian counterparts because they would undoubtedly provide many tips
    -These services make VS far more attractive to alliances, also total frequencies go from 20ish flights a day to 35ish. Big jump!
    -BA currently operate the services they will have to give up in March, the slots are not stagnant, well be consolidated, so expect a sizeable reduction in Manchester, Edinburgh and maybe Leeds flights. This will also open the market to Virgin.


    Str8Talking
    Participant

    I am always glad to see increased competition in the aviation market, however, I certainly don’t believe that Virgin is keen to take on domestic flights because of its dedication to passengers and customer service. I think LeTigre’s last post says a lot. By having these flights, Virgin Atlantic becomes more attractive to alliances, which Virgin themselves have declared as their only way forward in the current climate if they are to survive.


    sparkyflier
    Participant

    Virgin in the past had the BMI feed, and the removal of that must have been very harmful to their business. Lets say BMI gave just 10% of the traffic from LHR from their feed, well 10% is a huge difference nowadays in such a tough climate and when making losses.

    The domestic route feed will make them far more attractive to other alliances, and some airlines are leaving/reducing LHR partly as a result of the feed – look at SAA & Air NZ.


    Bucksnet
    Participant

    Are Virgin allowed to stop flying to the destinations they got the slots for, and then use the slots for more long haul?


    Henkel.Trocken
    Participant

    I think you will find that unless the slots are protected for a particular route then VS can do what they like with them.

    They will have to be seen to operate LHR-ABZ/EDI for a short while and then they can wind them down. It will be difficult to argue business/social need for the routes to remain. I remember a business case being put when BD pulled LHR-MME and it failed miserably as there were links to area by train. The same would happen with ABZ and EDI as they have links with BA.


    greyhawkgeoff
    Participant

    Seven daily slot pairs to be used between Heathrow and either Edinburgh and/or Aberdeen.

    · Henkel FYI I quote from IAG in March ‘ Five daily slot pairs to be used between Heathrow and the following destinations – Nice, Cairo, Riyadh, Moscow, Edinburgh and/or Aberdeen.

    Seven daily slot pairs to be used between Heathrow and either Edinburgh and/or Aberdeen.

    · Two Heathrow daily slot pairs will be leased to Transaero for use on flights to Moscow. ‘

    The slots remain with IAG and are supervised by an independent trustee, much like the slots given up by BA when they got the AA/BA/Iberia anti trusty immunity a couple of years back. From memory they gave up 2 per day to Boston, 2 to JFK and one each to Miami and Dallas Frort Worth. Delta took up Miami and have since retreated, Boston they also took and have cut back to one, while no one took on Dallas against pairing the twin hubs of AA/BA.
    So if Virgin give up on Scotland the slots revert to IAG unless some else finds favour with the trustee………..

    Two benefits of the Virgin start up are – 1 they will want to use T3 at LHR and this may accererate BA consolidating on T2/Heathrow Eats. And 2, 12 slots equates to probably 4 short haul aircraft in service, freeing up their transfer to LGW along with the 15 to 20 surplus Iberia A320s next year. The 737-400s may yet be gone sooner than we think!


    Bucksnet
    Participant

    The trouble is they have different engines. Still, if the ex-Iberia planes are dedicated to Gatwick, and form their own subfleet, then it’s a very quick and cheap way of retiring the old 737s.


    LeTigre
    Participant

    Interesting thoughts.

    http://www.flightglobal.com/news/articles/virgin-atlantic-secures-iags-12-heathrow-remedy-slots-379181/

    A few more bits I’ve found:
    -VS originally planned to operate to Moscow and Nice as well as Scotland, however, due to the Easyjet ruling, they are likely to be asked to operate to Cairo or Riyadh instead, unless SRB’s lobbying of the kremlin is successful
    -Aircraft are definitely going to be in Virgin livery
    -Wet lease arrangements were only made because ordering aircraft on slots unwon is too risky and the requirement only of max. 4-5 aircraft

    http://ec.europa.eu/competition/mergers/cases/decisions/m6447_20120330_20212_2452290_EN.pdf

    Here’s the important bit:

    ” 1.1.3. Grandfathering rights644. As a general rule, the slots obtained by a prospective entrant must be operated on thecity pair(s) for which they have been requested from IAG and cannot be used onanother city pair unless the prospective entrant has operated them during at least sixfull consecutive IATA seasons (“the Utilisation Period”) The prospective entrantwould be deemed to have grandfathering rights for the slots once appropriate use ofthe slots has been made on the city pairs at issue, for the Utilisation Period. Once theUtilisation Period has elapsed, the prospective entrant would be entitled to use theslots obtained on the basis of the Commitments exclusively to operate services on anyroute connecting London with any other part of Europe (including Aberdeen andEdinburgh), or on London-Moscow, London-Cairo and London-Riyadh.645. During the Utilisation Period, the prospective entrant shall not be entitled to transfer,assign, sell, swap or charge in breach of the Commitments any slots obtained fromIAG (except for changes to any such slots which are within the twenty/sixty minutestime window and which have been agreed with the slot coordinator.). Provisions onmisuse of slots also apply. In the event of a misuse, the prospective entrant shall havethirty days after such notice to cure the misuse, failure to which gives IAG the right toterminate the agreement and obtain restitution of the slots.”

    Six IATA seasons = 3 years to 2016

    So, even after this period they must remain European flights, so this means a LONG TERM COMMITMENT TO SHORT HAUL.


    LeTigre
    Participant

    Expect schedules in a few days time.


    VintageKrug
    Participant

    Much as I’d like to see it, I can’t see Virgin continuing to operate domestic services long term.

    While there is a requirement that these slots should serve European/ShortHaul destinations, there’s no requirement thast these should continue to be operated by VS. And there is no certainty that short haul requirement will persist, especially in light of the Davies Report initial findings next year.

    I can see some sort of midhaul operation making sense, but the former bmi/now BA have these routes sewn up.

    If Virgin can introduce some of the Virgin America fleet, and their excellent interiors, then that would be a real differentiator.

    Would it be possible to assign some of the US A320 orders to Virgin Atlantic? Or are the companies, as I suspect, very separate?


    seanyjmuclhr
    Participant

    Whether you’re a BA or a VS fan, this is great news for the consumer.

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