Ba Buys Four Heathrow Take Off Slots From United

[USFlyer]

http://biz.yahoo.com/ap/031011/eu_fin_com_..._airways_2.html

Were these slots unused or is service being curtailed to the NY metro area?

 

[gatemech]

I thought the Atlantic & Pacific is where we were making money.

Didn't Pan Am start making their nosedive when they sold LHR to UAL? If the price in the article is correct then UAL is really in bad shape. That amount of money isn't going to help too much.

 

[UnitedChicago]

Not to sound like I'm drinking the kool aid - but i'm sure these were long dormant slots. With a stable schedule pretty much since UA bought them (with the exception of ORD-LHR) i would guess they would not be used any time soon.

It's not like their desperate for cash as they have plenty via DIP (as long as they meet the covenants). Their semi-desperate for revenue.

Perhaps this was a safety blanket in case things get tight in october in terms of meeting the covenants? There will be nice blips in november and december thanks to the holidays.

If this scenario is correct then it's the prudent thing to do.

 

[ual06]

Holy Molly! Just can't believe that after all I have read on these boards, that the Dave's did not snatch em up.

 

[UnitedChicago]

UAL06

That's the funniest thing i've read in a long time! United's talks with U regarding these 4 slots were held hostage to the PIT situation.


Hahahahahahhahaahahahahahahahahh.

GO CUBS!

 

[ual06]

Or perhaps the slots were about 20,000 miles too far to the West.

 

[UnitedChicago]

And just to provide credible, tangible, in a word REAL information to back up my claim that U's bid was held hostage by the PIT situation. Respectfully read the quote from the WSJ below:

"BA paid $19.2 million for the prime slots from Heathrow to New York after an auction among carriers, the source said, speaking on condition of anonymity."

Read: auction among carriers

So we know U and David Bronner were in a position to bid - AND DID NOT. I mean when I've talked with David in the past - he said he would aggresively bid for UA assets.

Hmmmm. What happened?

 

[TheLarkAscending]

Hmmmm. What happened?

A source close to, but not quite near enough to completely overhear the minute details seriously believes that they'd simply misplaced their auction paddle. 😉

 

[tadjr]

And just to provide credible, tangible, in a word REAL information to back up my claim that U's bid was held hostage by the PIT situation. Respectfully read the quote from the WSJ below:

"BA paid $19.2 million for the prime slots from Heathrow to New York after an auction among carriers, the source said, speaking on condition of anonymity."

Read: auction among carriers

So we know U and David Bronner were in a position to bid - AND DID NOT. I mean when I've talked with David in the past - he said he would aggresively bid for UA assets.

Hmmmm. What happened?

Not that I care to get into the "he said, I said" thing going on here (I think it's really childish on all parties parts), but US doesnt serve Heathrow or Kennedy so there wouldnt be a need to bid for 4 slots at Heathrow. We'd much rather spend the money on something really important like keeping Midway flying. :bleh:

 

[TheLarkAscending]

US doesnt serve Heathrow or Kennedy so there wouldnt be a need to bid for 4 slots at Heathrow.

Why let a little thing like reality and facts get in the way of a good UCT?!

 

[Bear96]

So we know U and David Bronner were in a position to bid - AND DID NOT. I mean when I've talked with David in the past - he said he would aggresively bid for UA assets.

Hmmmm. What happened?

Actually they were NOT in a position to bid.

There are two separate authorities governing LHR flights: one governs ROUTES and one governs SLOTS. An airline must have both to fly to LHR.

ROUTES are governed by the Bermuda II agreement between the US and UK governments, which currently limits US flag carriers serving LHR to AA and UA only. Neither U (nor DL, NW, CO, etc.) could have bid for the slots because they don't have the route authority-- the bidding would have been limited to the airlines that have LHR rights. Bermuda II also limits the cities that can be flown nonstop to and from LHR. That is why AA, which has LHR rights, still cannot fly DFW-LHR-- DFW is not a Bermuda II city, so they have to fly into LGW from DFW instead.

This (yet to be confirmed) news has to do with the SLOTS. The take-off and landing slots (times) are controlled simply to prevent congestion at the peak times of the day. It is similar to the slot controls we have in the US at DCA, LGA, and ORD.

So to fly to LHR an airline would not only have to have the Bermuda II authority to fly to LHR at all; it also only be able to fly to/from certain Bermuda II cities; AND it would have to have the slot times to actually arrive and depart.

What does this mean for UA, that they dumped some slots? Is it yet another sign of doom (as some no doubt will be pointing out very soon, probably on the U board), or is it a wise business decision to dump under-utilized assets? It doesn't sound like a good thing on its face. But consider that UA has been operating nearly-empty LHR-BRU and LHR-AMS services off and on for years now, just to hold the slots (which are use-it-or-lose-it). And the pilot concessions have made the B747-400s much more economical to operate, which are now being reintroduced as upgauging on several LHR (and other international and domestic) routes this coming winter. So it is very possible that UA will be operating the same number of SEATS between the US and LHR in the larger equipment, while needing fewer slots (and flights) to do it-- so this could be seen as an improvement in efficiency.

 

[RowUnderDCA]

This Financial Times article suggests that UAL is cancelling its LHR-EWR and LHR-BRU flights, resulting in the excess slots that BA is acquiring. But I see that the EWR flights couldn't be transferred to another more productive hub for UAL..... say PHL?


http://news.ft.com/servlet/ContentServer?p...d=1059480523275

 

[JFK777]

I can't believe how cheaply BA got these slots for. $20,000,000.00 is cheap for two pairs of slots. When AA bought from TWA in 1991 they paid $445 million for BOS, JFK, LAX for 10 pairs of slots. They got Miami for free since TWA never flew Miami - London( sorry Pan AM, they didn't have to pay Pan Am either for Miami). Twa's ORD was a previous deal about a year before the whole LHR sale to AA for about $195 million ( Crandall wanted it badly and Icahn knows when to cash in). AA got Miami, BOS, LAX, ORD and JFK, they bought a whole network and how they have made it work.

UA paid Pan Am $400 million and lots of empty code share promises. UA for its troublt got JFk, SFO, LAX, IAD and later through their own efforts ORD. UA really got strong gateway's fitting its hubs nicely. SFO, LAX & IAD have been cash cows since the beginning, JFK, never a hub for UA, has been a niche gateway for UA to LHR. AA, BA & VS are the big three on the JFK-LHR route. With ORD, IAD and SFO, UA dominates those three cities to LHR.

With no more Concorde I think VS star will only rise.

 

[phllax]

If I recall correctly, the slots for UA's ORD-LHR flight came from a long dormant PHL-LHR authority that they had and never flew.

 

[USA320Pilot]

Bear96's analysis is correct, US Airways could not legally bid on the LHR slots, and the UCT proposed the sale of assets at LAX, SFO, DEN, & ORD, however, that could change.

Meanwhile, United Airlines has posted 18 767-222s as available for sale on SpeedNews.com. Six aircraft are available for immediate sale, while the remaining twelve will be available for sale as they retire from United Airline's schedule over the next 15 months.

Furthermore, US Airways was denied a Internal Revenue Service (IRS) waiver to stretch out pension payments. What effect will this government sentiment have on United's request to seek waivers to permit it to stretch out mandatory payments to all four of its defined benefit pension plans over a five-year period?

Regardless, has the company begun an asset sale presumably to meet upcoming DIP financing requirements (since ALPA president Captain Duane Woerth said the airline just made its DIP requirements this summer) and to obtain exit financing?

Moreover, could we see a UCT or ICT in the not-so-distant future?

Respectfully,

Chip