Delta and Air France joint partners yes in form, integrated in service no.

Not a pretty sight.

Many of the airline JVs are touting their seamless service. Sadly this is not the case. It is important to consider that as a user the expressions and impressions you use and leave behind permeate. By now we should be long past trying to hoodwink your customers. Airlines however have yet to learn this lesson. Some have – others keep stubbing their toes. Qantas and its various unsuccessful attempts at Social Media prowess would seem to be a case in point. Airlines need to step up their game across the board.

And this is where I want to pick on someone who should be my favorite airlines. I am elite on many airlines. With Delta for the first time I have reached Diamond status. Delta is currently running lots of ads extolling the virtues of people. Delta people.

Delta people are good. Sure not everyone can be perfect all the time. But they try pretty darn hard. But Delta people are the only ones servicing Delta customers.

Let me describe an issue which illustrates that this is more of a structural problem. While on a long distance international business trip.  I received a phone call to say that my waitlist on a DL flight had cleared I was told to call my “local” DL res office. When I called DL Reservations in UK it was answered by a rather obnoxious Air France representative. (BTW this is the usual way AF deals with DL pax. They are generally arrogant and rude even when dealing with AF passengers. I really don’t know where they get them from but AF really does seem to go out of their way to hire people who can best Ryanair for customer service skills). She insisted that there was no upgrade authorized in the reservation, therefore I must be lying. However gritting her teeth she did divulge that I was still listed as waitlisted. I told her that my DL account showed that the WL had cleared.  

The issue is three fold. Firstly DL should see that I am travelling and should use email as a way to communicate. Then there is no ambiguity. Secondly AF does not have access to the full system. As there are no longer any DL full service personnel answering the phones this represents a huge problem. Particularly for frequent travellers such as myself. Thirdly, the AF agent (a much nicer person!) at the airport was unable to get to Skymiles to confirm the information necessary (certificate number). If my flight had departed before say 0930 that would have meant the agent did not have access to the information nor could they obtain it. Recommendation is that there should be an automatic roll over back to Atlanta Skymiles desk when the local desk is not occupied.

A general observation. The so called seamless service of DL/AF/KL is flawed in many ways. A process team should be looking carefully at the whole manner of integration. As I noted above Delta's advertising talks about "Delta People". I am sure that Delta people would have handled it. However Air France people attempting to behave like Delta people are unsatisfactory. So much for the fiction of seamless. And just in case the other airlines want to have a quiet snigger about this. DL’s experience is not unique. The other global alliances and the inner JVs are just as bad. In some cases WAY worse.

C’mon guys. You need to put some meat behind that service. Otherwise then regulators should be looking hard at penalties for failure to deliver on your promises to them when these programs – mergers in all but name – were approved.

Cheers

Do Air France A380 Drivers Need Rear View Mirrors?

Oh dear for the second time in the relatively short in service life of the A380 with Air France an A380 has to be removed from service because of a bit of bad driving.

IE these issues occurred ON THE GROUND. First up last October in Paris an A330 winglet tip sliced through the tail cone of an A380 parked at an adjacent gate. The guy at fault was the A330 driver.




On April 11th, at JFK in the evening AF7, operating with a full load of 520 passengers touched a Comair Commuter CRJ-700 with 62 passengers operating as a Delta Connection DL6293 service touched and broke the winglets on the A380. The guy at fault was PIC on the A380. For a bit of dramatic video... check out CNN with video from NBC New York.



So we have a recommendation to Air France. Please get rearview mirrors or a back up camera. Alternatively - please send your drivers to advanced school.

The US Authorities according to the Guardian have impounded both planes and are running a full investigation. So the plane will be out of service for a few days. That is expensive.

Cheers

The Red Bag Story

Or How I got home on Friday despite all the odds.

On Friday (December 18th) I had a salutory lesson on travel. What ever could have gone wrong went wrong. But also its a lesson in how knowing the system and actually the generosity of customer service people can thwart the obstacles and get you what you want.

The ingredients are simple. An expensive coach ticket Berlin to Seattle. DL flight numbers AF operated metal (code share). Bad weather across Europe. Incompatible systems AF and DL.

Knowing in advance that things were going to be bad (last friday of the year for travel) I decided to go to the airport early. Just before leaving - I checked my itinerary on DL and found that they had changed my flight to a connection over NYC on DL rather than the AF code share over Paris. OK - I accepted that. (ESP since I received an upgrade). But it meant hanging around for 6 hours at Tegel Airport. Surely there was a better way. Arriving at the airport - I was met with at least 100 people who had the same idea. After a 90 minute wait in line - I made it to the front of the queue. Sorry your AF flight is cancelled and I cannot help you. Go to DL (Who opens in another 30 mins). Schlepping between gates in the snow became a fun exercise.

DL said great yes you are confirmed but no we cannot issue the boarding passes because we need the ticket. Eventually after much tooing and froing - back I go to AF. Cutting in line (it was still about 100 people long) I managed to get them to write a FIM (these are great - its essentially a get out of jail free card). Back to DL who then issued my ticket.

The rest of the journey was very fraught as it was late and there was a huge storm headed to NYC. But with 45 mins to spare at JFK - I managed to get my bags - check in for the next leg and then race across the 2 DL terminals just as the last few passengers were boarding the connection flight to Seattle.

I knew my bags would not make it despite the smiles of the JFK baggage team. Sure enough arriving in Seattle they didn't. And yes the possibility of bags showing up became remote as the day went on. With the East Coast largely shuttered by the storm - the thought of my bags not making it because more and more a fear. However yes - my bags were on the van on its way over. Hurray!!! And yes there were 2 bags and yes the second one was red. Disappointment. The assumption that the second red bag was mine was just too easy.

However by 9PM (now 24 hours later) my trusty red bag showed up.

So no morals here other than some advice.

Here goes:

1. Hardcopy EVERYTHING!!!
2. Be polite and nice and get the person's name at each stage. AND YES THEIR INTERNAL PHONE NUMBER.
3. Always thank them
4. Trust them to know their jobs.
5. A FIM (when your trip is interrupted) is a wonderful thing. Get one no matter what.

And above all...

Be PERSISTENT - it is a required skill in Travel

As a special thanks - I would like to thank Daniela (DL Customer service in Tegel). Her counterpart at AF - Anita. The DL team in NYC for protecting me. And also to DL's baggage service and their contractor in Seattle Bags Inc.

I am now home and the Xmas presents made it also

Cheers

More Stupid Airline Tricks - When is a Boarding Pass Not Really a Boarding Pass? When It's From Air France.

OK - so I have to go to a Funeral in France. Sad all round but I managed to get a seat courtesy of my German Travel Agent (Thanks Evi!!!)

So she produced the right documentation for me and I have an Air France Record Locator. So after getting the same error and waiting for several hours on the phone with AF (I gave up after 1 hour the first time - the second I was rewarded after a 90 minute wait) - I managed to speak to an agent. I would like to thank her but didn't catch her name - she was very helpful!

So she guided me through the process of issuing a BP online.

Here are the last 2 screens (of 10 that I had to go through BTW). the left one is the final confirmation - the right hand one is the actual print out of my document. So look at the circled items.

I just love the breadcrumb indicator - It says "BOARDING PASS."

Also on the page on the left it says:

Thank you for checking in online
"Your confirmation print is being opened in a PDF file."

The small print reads as follows:

Departure information

* Upon arrival at the airport, follow the instructions on your boarding pass.
* If you wish to print out or reprint your boarding pass later, you can do so before the Check-in Deadline for your flight:
- by entering your electronic ticket number on the Internet check-in log-in screen,
- or directly at the airport, either at a Self-Service Kiosk or by going to the appropriate check-in counter.
* If you have baggage to check, please go to the ""baggage drop-off"" counter before the check-in deadline. Otherwise you can make your way directly to the boarding gate.
* Thank you for using our Internet check-in. Air France KLM wishes you a pleasant trip.

OK so there are three references two of them say "Boarding Pass" and one says "Confirmation". So I guess I would go with the majority. FOOLISH ME!!!

So you hit the print button, and print the formal document but there is a small disclaimer...(the right image) that says:

CONFIRMATION TO BE GIVEN TO THE DESK
Reminder, this is not a boarding pass.

OK so AF which is it. Do I have a BP or not? Well we know the answer - its a Gallic Shrug....

Oh yes - a couple of other stupid AF pet tricks...

1. The premium seats are available for $65 each. (See my post from yesterday on BA's new insane pricing).
2. AF's seat maps on DL don't correspond to the real ones.
3. Amadeus does not give you the real AF record locator. It is yet another fake one from the Erding based host.Fortunately the AF agent gave me the correct one.
4. The AF error gave no indication of the problem - just told me that there was a web site error and that they were going to fix it in the "shortest terms" I don't make this stuff up.

Need I go on....

Dear AF+KL+DL+NW - can you get this working a little better for my next time on your new Transatlantic Alliance flight.

Thanks!

Gotta love these guys.... where do they find the people to create these things? I really want to go and learn at these airline schools of disinformation. It would make any propaganda ministry proud.

Cheers

Olympic: Next Skyteam Member?

So this is speculation on my part.

Olympic has just filed for some code-share agreements with DL and the DL subsidiary Comair.

However given that the former national carrier is but a mere shadow of itself this is becoming somewhat likely. Its main rival is Aegean who is already on the boards to become a full member of Star by mid 2010. So what is left - not much - Skyteam seems to be the best option. it is already in cooperation with AF so this seems to be the logical solution.

We shall see - but in the event they go this way - then you heard it here first!!!

Cheers

Travelport Caves - AF/KL Deal through 2013

Air France Group and Travelport have come to a meeting of the minds on the GDS fee issue and so have negotiated a deal whereby AF/KL will get reduced fees in return for full content through 2013.

Given the speed with which these guys came to a conclusion - someone caved. I suspect it was Travelport. So without a shot being fired they came to a conclusion almost too quickly.

So a lot of GDS execs are probably breathing a huge sigh of relief. GDS users are probably also breathing a sigh of relief. But some people - me included - want to know what is the catch.

So does everyone think that there has been no change?

Think that at your peril

EU Traffic powers ahead driven by LCCs and mega carriers

While BA's traffic continues to show declines – albeit at a lesser pace – the big 3 LCCs are powering ahead. So too are the other strong legacy carriers in particular LH and AF+KL. All 3 big LCCs report strong traffic gains – FR +22%, Easyjet +16%, Air Berlin +28%. The model still works. But Air Berlin should be looking for better solutions. It has essentially dumped the long haul scheduled business and is now looking to cut elsewhere.

Even those carriers who are most vulnerable in the second Tier EU legacy carriers (SK, IB etc) are appearing quite strong. But this is going to be short term. We believe that the top tier big 3 EU carriers have the ability to easily weather the economic climate. Similarly the 2 British Isles based LCCs. Everyone else without exception is vulnerable.

UK's Airlines will lose under new Taxation Scheme

The old adage in the UK travel industry used to be - "Punters will walk across the street for a quid". For lay or not Brit-speak folks - a Consumer would rather save a pound and walk to another high street travel agency.

Well it seems that the UK's Chancellor of the Exchequer despite having been previously the Minister of Transport had not heard that saying.

Alistair Darling (like his leader a rather dour Scotsman), has significantly elevated the UK Air Duty. Much to the outcry of the industry, the new duty penalizes long haul. Ostensibly for reasons of applying a green tax. However he may come to regret his format.

The tax can only be imposed on the first sector. Therefore the departure tax for a flight connection into Europe could easily save a UK family of 4 up to GBP200 per trip. Thus for example a BA based holiday for 4 to Australia will be 200 pounds more expensive than for the same flight booked via Air France or Lufthansa.

Talk about pound foolish!

At a time when BA's whole business model is under threat because of the appalling infrastructure issues at its main base LHR (on which we have commented frequently). This will just add to BA's woes. It will however badly impact also BMI and Virgin.

Clearly the UK government has no clue about how the airline business works.

Have a nice day.

So its done - NW+DL = DelWest or Big DL

Welcome to the world’s largest and potentially most troubled airline New Delta

At a time when people should be considering how to reform their models – Delta and Northwest have decided that the world is better off with a large monolithic airline. Frankly this is good news for just about everybody else but Delta+Northwest Passengers and Staff.

For British – the new airline will adopt a moniker of Delboy.

The aim of the new airline is nothing short of worldwide domination with Air France/KLM group taking a stake and the Skyteam Alliance effectively becoming the AFKLDLNW alliance.

The rest of the US market will see rapidly rising air fares. Thanks a lot. So lets speculate a little at what is going to happen in the next year.

Dismantling of the CVG and MEM hubs. Restructuring of the regional business reducing ACMI flying. Bruising competition at certain key markets. The one benefit will be more International service.

Personally I think this will end badly for the stock holders. Sure the Hedge Funds will win in the near term. But the regular stock holders will be looking badly at this in 3 years time.

Could this be the end of Alaska Airlines Independence?

Cheers

T

Is Air France paying too much for Alitalia?

Air France is buying Alitalia. A big sigh of relief goes up in Rome. A challenge will be filed from a certain building not a million miles from Dublin Airport. But is M. Spinetta (isn't that an Italian sounding name?) paying too much? Probably not for dominance.

But the price to be paid is not for the intrinsic value of the business - it is so someone can save face.

Alitalia will require a massive investment program. At a time when airlines operating costs are going through the roof. One could argue - if one was a French Trade Unionist - that the investment in AZ could be much better served in paying more money to AF workers.

A resurgent Alitalia could provide a much needed boost to the Italian economy. I am not so sure that the new EC entrants are going to be happy about that. Why is this important? Because when the issue of alleged illegal state aid for AZ finally wends its way before the commission it may just end up in front of a not so happy administrative law judge.

The year is starting with a bang... Thoughts on DL-NW + AF/KL

Those of you who are regular readers know that I am personally opposed to the idea of a DL+someone else merger. I just cannot see the logic in the near and probably long term for such a Union.

So for the next 2 weeks (that's DL's time line) actually 3 months is more likely! We are going to be subjected to the constant war of words between the protagonists.

As we noted in our 200 predictions - the market in the USA is ripe for investment from EMEA (that's both Europe and the GCC states). Finally someone else agrees - the WSJ today described the first thing that Richard Anderson did after leaving Friday's Board Meeting where he secured the OK to negotiate with NW and UA. Where did he go? Paris.

AF/KL holds the key card in this conversation. They are the biggest player in the world and their JV with DL and NW separately makes the union a good tie. HOWEVER I stand by my statements earlier. This is not good for the two players. NOR will it be good for the customers and staff.

As for the alternatives - UAL is a basket case and no one should touch it.

But the impact of the DL+NW merger will be far reaching and not necessarily good. Fortunately it seems that Senator Oberstar seems to agree with me. Fortunately he comes from Minnesota so he has a vested interest in not seeing it happen! Oh yes he is a Democrat which almost counts for something these days.

I stand by hope that this will be resolved not by a full merger but by a combined alliance/JV which makes much more sense.

Cheers

"Sir Francis Drake - Sire! The French Have Captured The CIty What Are We To Do?"

It bad enough that the major UK airports are now run by a Spanish Construction company, now comes news that the French have captured effectively control of London City Airport by acquiring 50% of all the slots there. Air France/KLM Group have swooped in an acquired VLM Airlines (Belgium operator) who with a fleet of F50s and a single BAe 146 was the largest single carrier at LCY.

Over the past few years as UK road and public transportation has degraded, the Docklands development has improved and of course LHR has become more of an embarrassment than an airport - LCY has slowly grown. It is now handling over 2.5 Million passengers on a single runway with no aircraft larger than an AVRO 100 currently servicing the place.

AF/KL was already almost joint #1 at the airport having acquired Irish player CityJet in 1997 and through its upcoming codeshare relationship with the #3 player at LCY - Scot Airways (the former Suckling Airways).

Shut out!

BA acquired a nice footprint at LCY when it acquired CityFlyer and then subsequently sold off most of the business to Flybe. However its ambitions are now well and truly thwarted after BA was unable to prevent the Franco-Dutch juggernaut from picking up VLM. BA will have to make do with very few slots and pickings at LCY.

So sorry Willie.

Only a few more hours to go; Will the Italian Government Postpone the Alitalia decision again?

OK so today is D day for Alitalia well at least its scheduled that way.

There are 2 front runners (AF/KL and AirOne investors) and a dark horse (local Italian investors) and several - well others (SQ, perhaps) - waiting in the wings.

Most people are betting on AF to win. But we have a slightly contrarian view that this may not actually happen even if the Prodi Government chooses AF or even AirOne. How so?

Remember a little earlier this year that the European Commission ruled on a small case of RyanAir and Aer Lingus? Don't think that Mr O'Leary has forgotten this little sleight. There is a strong possibility - no make that a certainty - that who ever wins will see a challenge filed by Ryanair amongst others.

The EC is going to have a pretty hard time approving an airline merger given the concentration argument it used against FR+EI. Further there is still a simmering dispute on the question of how much State Aid will need to be paid back.

Folks this one may yet run for months. Even with Alitalia losing altitude all the time.

Happy punting....

Alitalia - it aint over yet folks

Well they postponed again - but now there is a reason. LH is back interested. SQ is denying everything and even BA is having a look.

The price just went a little higher. However will it go really high? Not in our opinion.

Stay tuned.

AZ - the final drumbeat calling the faithful?

The final round of choices for the perennial life supported Italian Airline seems to be approaching. However the final choices seem to be somewhat mundane. Approved for the final round was AF/KL, LH, SU and Air One. TPG having been unable to persuade their first partner (Mattelin Patterson) or find another one, officially threw in the towel over a week ago. Besides they have several other shiny new projects to worry about.

Now it appears there is only LH and AF/KL in the running with SU a long shot. Call it part of the fallout from the liquidity/mortgage crisis but the numbers don’t look so hot now to the potential suitors.

Realistically AF/KL has to be the lead. Remember there is so much emotion and politics wrapped up in this one - logic and commercial common sense does not really work. At least AF/KL won’t close down the Alitalia brand (even though perhaps they should!).

We just can’t imagine Prodi's somewhat shaky coalition approving a Russian or a German ownership.

We can hear Michael O'Leary's cackle from here......... Cheers Timothy

Detla and Air France announce new Atantic JV

Delta Airline and Air France have just announced the first major foray into the transatlantic Open Skies venture. By making it a JV they resolve any issues about how it will be operated.

Initially covering JFK-ORY, JFK-LYS, and of course JFK-LHR and ATL-LHR. 3 new slots at LHR will be accomodated by Air France surrendering some of its slots to Delta who will operate the service.

Reported by both CNN.com and USA Today - the deal has been in the works for some time and will start in March 2008 and run for 8 years. It will eventually the joint venture is expected to increase revenues, competition and customer travel choices on key routes across the Atlantic.

The first phase will begin April 2008 and will include all non-stop flights operated by Air France and Delta between Air France's Paris-CDG, Orly, and Lyon hubs, and Delta's Atlanta, New York - JFK, Cincinnati and Salt Lake City hubs. It will also include flights operated by both carriers between London-Heathrow and the U.S.A combined 19 daily flights and more than 4,500 seats per day -- a 45% increase -- are expected to be part of the first phase of implementation.

Specifics about the SLC-LON service has not yet been clarified.

Is the EC trying some wizardry to appease Amadeus?

On the eve of the release of the Harry Potter final installment - perhaps we are seeing some signs and clues as to how the EC will define its long awaited changes to the GDS regulations. Up until now we have all assumed that the focus would be on the relaxation of the rules along the lines of the US deregulation of the GDS marketplace. But no - it would appear the bureaucrats in Brussels have other plans in store for us. The final chapter in this saga looks like it is going to have a few interesting plot twists and in the end The GDS/Harry character may not be killed off.

The issue it seems in the somewhat single tasking mode of the EC is that they are responding to some obvious pressure from the Amadeus lobbying efforts. They are now opening the door to the definition of "Parent" carrier. The origins of the "Parent" carrier term come from the 1980s when the battle was initially between the "Have" airlines - i.e. those who owned a part of a GDS vs. the "Have Not" carriers. Since this was clear at the time no one needed to have much definition. All EU based major airlines were all by definition "Parent" carriers by dint of the ownership stakes in either Galileo or Amadeus.

Fast forward to today and with the major airlines in the Galileo group all now non "Parent" carriers and even SAS is not an owner - then in Euro speak the definition is moot.

But I offer two other thoughts for consideration. The definitions of "Control" and "Distribution" should also be on the table for interpretation. Why?

Let’s start with "Distribution" the lines are now clearly drawn differently as we have fragmented distribution. With Amadeus focus now on airline IT it is not hard to see that actually distribution control can be effectively managed through the Airlines' PSS (Passenger Sales and Service aka internal Res Systems). So PSS systems are today doing much of what the GDS did before. If PSS systems were added into the loose definition of GDS in a redefined term of Distribution Platform then Amadeus would fail in my opinion the test of dominant control. Specifically we believe at T2 that the System User agreement should be examined in the same context as the "neutral" GDS agreements.

Now let’s consider the term "Control". The 3 participating owner carriers (and I choose my words carefully hear) are indeed much stronger than they were in the late 1980s and 1990s when the regulations were drawn up. Further the US share of the Transatlantic market has fallen significantly in actual passenger counts. The concentration of control among the 3 is pretty compelling.

However take both terms together - Control AND Distribution - and add ALL system users, CTP (Star Alliance - Common Technology Platform) users, all ALTEA users in the EU together and there is clearly a dominance and concentration of market power the likes of which we have NEVER seen before.

It was our hope that the EC would enact the new legislation for the protection of the consumer and the smaller EC airlines to prevent abuse of the monopolistic power concentration that can occur in situations such as these. Unlike the US market - the EC has the power of judge jury and executioner. They can both write and implement legislation. There is no check of the legislature at this level. Appeal to the judiciary is such a laborious process that it is effectively mute in all but the most high profile of cases. AND it takes many years of significant expense to challenge.

The story is not yet over and there will be many more plot twists. The EC has been known for using some of the Black Arts to conjure up dark forces cloaked in respectability. Let’s hope that
Olivier Onidi doesn’t turn out to be the real Voldermort.

For further reading we recommend going to the EC's Transportation section, Air Transport Portal: http://ec.europa.eu/transport/air_portal/index_en.htm.%20Specifically look a the comments on "Possible revision of Regulation 2299/89 on a Code of Conduct for computerized reservation systems (CRS)" http://ec.europa.eu/transport/air_portal/consultation/2007_04_27_en.htm
Note that the EC uses the older term CRS Computer Reservation System - rather than the more common GDS, Global Distribution System. Perhaps this different wording has an impact on the actual spells used.

OK so I carried the Harry Potter metaphor a bit far but my comments are valid. You have been warned. I have experienced first hand the power of the EC in this regard and how they listen to the "home team" of Amadeus lobbyists.

Other resources I suggest are to go to the BTC's website. http://businesstravelcoalition.com/

Cheers

Timothy

Timothy J O'Neil-Dunne
Managing Partner - T2Impact Ltd
Global Travel eBusiness
Tel (US) +1 425 836 4770
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http://www.t2impact.com/

For Airbus - what is the compensation for the delay of the Whaleliner?

Disclaimer - this blog entry is pure speculation on our part. However we believe the numbers to be accurate for the aircraft concerned.

For some time we have been trying to assess the likely impact to Airbus customer airlines for the delays. We now believe that the offer is pretty clear. It is a 5% free off IF a further aircraft is purchased. Rather a kind of buy one get one free to the affected airlines. We know that Virgin has opted to take a delay with a small compensation. However for the major players this translates into bolstering the order book. As a result We estimate that a total of 18 aircraft will be added to the production order book as a result of this special offer. Not quite compensation for the cancellations of the Freighter version of which 20 were ordered but then cancelled by UPS and Fedex.

T2 estimates that the current order book changes (prior to the Paris Airshow) will be as follows:
EK +4 (announced), AF +2 (announced) QF +8 (of which 2 will be compensation - announced), We believe that ILFC and SQ will announce 2 additional orders each. LH will add 3 with one a piece going to KE, TG and MH. A possibility exists that QR and EY will vie to order at least one a piece. However it is wrapped up into whether the orders for A350s will be made permenant. We dont think the (at least 1) private A380 will actually be taking up the twofer deal. Total cost at book value to Airbus in these special deals will be over 2.2 Billion Euros.

Airbus is planning some blockbuster announcements for Paris. Some of those orders will be part of these deals we believe. Boeing will be low key as they have been having a lot of basking in the sun at Airbus' expense of late.

Stay tuned. This could be fun

Cheers

Timothy

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