Ah the sweet smell of Slots in the morning

Indulge me a little with speculation. I am sure that someone is REALLY kicking themselves at BA right now that they didnt pick up BMED when they had the chance. BMI paid GBP30 million for BMED. Lets assume that this includes assets and leases etc etc. But what of the slots?

Welcome to the world's most expensive 2 minute experience. A slot at London's Heathrow Airport.

Currently at LHR BMED has 73 listed slots a week. (Source BMED website). The current valuation for slots at LHR ranges from GBP 10 million per slot (paid by Qantas for 2 slots in 2004) and GBP 5 million at the low end. So lets just say its in the middle then the value of BMED for slots alone at just under GBP 80 Million. Can you hear the weeping wailing and gnashing of teeth from Waterside. But this was before the US - EU Open Skies agreement. So added to this that there are going to be some very interested parties in acquiring at least some of those slots and you can see that the actual value could - well - DOUBLE. This puts BMI itself in a very commanding position as the #2 slot holder at LHR. And do we expect that HM Government will step in and regulate this process? probably not - although BAA remember is controlled by the Spanish and we all know what the Brits think about Spaniards invading our shores!

So the have not legacy airlines - from the USA - DL, NW, CO (all Skyteam members) and US (Star Alliance) are going to be anxious to fill the holes in their networks at a premium price. DL paid $21 million for the JFK-LGW route authority in 2006. So you know DL will pay a pretty penny. CO already filed for the route. DL would like to buy at least 4 slots initially - (2 for JFK-LHR and 2 for ATL-LHR) Over time they would like to buy at least 4 more - additional slots for JFK and ATL plus a slot each at CVG and SLC. Even horse trading with its Skyteam partners AF and AZ wont solve that problem.

Well folks roll up for the show - this is going to be one of the most expensive shopping sales in history. Lets sit back and enjoy it.

Cheers

Timothy