IAG owned British Airways has filed a slot swap request for all 12 of Flybe’s Heathrow slots. The British flag carrier already has a huge monopoly at Heathrow, with IAG airlines operating the lion’s share of the flights from the congested airport.
However, it seems these were slots that belonged to BA some years ago and was forced to give up, so it could have been written into the contract that they got them back if the airline folded. Either way, it’s not come at the best time for the British airline, as travel demand has slumped and the airline could struggle to keep the slots active.
Last week, in the wake of the collapse of Europe’s largest regional airline, we discussed what could happen to its valuable airport slots. In particular, we noted that Flybe still had some slots at the coveted London Heathrow Airport, and mused that these could result in a showdown between British Airways and Virgin Atlantic (not to mention a few upstarts from elsewhere too).
Well, now it seems that the wait is over, as One Mile At A Time is reporting that British Airways has acquired the 12 daily ex-Flybe slots at the popular London Airport. An eagle-eyed Twitter user had previously noticed the slot swap request filing, which indicated that the desirable slots were going to the UK flag carrier.
Why did British Airways get the slots?
The process for allocating these slots is rather unclear, but it seems to hinge on an eight-year-old agreement between British Airways and the European Commission. Back in 2012, when British regional airline FlyBMI collapsed, British Airways bought the remains of the airline, including its Heathrow slots.
At the time, the EC was worried that the acquisition would result in reduced competition and a lack of choice for the consumer. It was also concerned that domestic connectivity would also be affected, with British Airways opting to use the slots for international services instead. As a result, BA was required to give up 14 daily slot pairs, two of which went to Transaero for use on Moscow flights. Guess who got the other 12?
As such, it seems BA has ‘taken back’ the slots it was forced to give up now that Flybe can no longer use them. Whether this was part of the initial agreement or simply something the slot allocation people have decided to do in order to get them rapidly filled is unknown.
Strengthening its monopoly
Allocating the slots to British Airways, if it wasn’t a clause in the original agreement, is something of a puzzle. The airline’s owners, IAG, have an absolute dominance at the London airport, with 77 routes from the airport only operated by IAG airlines. Research by rival Virgin Atlantic last year found that one in four passengers departing from Heathrow had no choice but to fly on an IAG flight.
It would have been nice to see the slots allocated to a different airline, perhaps Virgin Atlantic themselves, or even an airline that doesn’t currently have a presence here. JetBlue has been eyeing slots in London for some time, as has Vistara, which, with its shiny new Dreamliner already in Delhi, is raring to begin its long haul operations.
With the decision to delay the third runway at Heathrow ringing in our ears, it seems British Airways’ monopoly at LHR has just been made a great deal stronger. Who knows when the next time will be that 12 DAILY slots are up for grabs?
A poisoned chalice?
Although BA will undoubtedly be happy to find itself with a great deal of added capacity at Heathrow, the timing couldn’t be worse. Already it’s been noted that the impact of coronavirus has caused a problem for airlines at slot restricted airports, promoting calls from IATA, A4E and even the UK Government for the rules to be relaxed.
The current rules state that an airline must operate its allocated slots at least 80% of the time. If they fail to do this, the slots are returned to Airport Coordination Limited, the world’s airport slot coordinator, and dished back out in a slot lottery (slottery?) for the next season.
Airlines all over the world are reducing capacity, reducing frequency and grounding aircraft in response to the lack of appetite for travel that has been caused by COVID-19. For BA to acquire 12 daily slots right now, when the aviation industry is in turmoil, is not great for the airline.
If British Airways can’t secure the demand to operate these slots, it has two choices available. Either it doesn’t operate them and risks losing them next season, or it operates ghost flights just to keep them active. Neither is a great outcome for the airline or the environment. You can bet BA is hoping ACL relaxes its slot rules pretty soon, otherwise it’s got a big headache to deal with.
What do you think about all this? Let us know in the comments.