Yet another alliance thread

[Scrooge]

The subject of VS joining an alliance is one that comes up on a semi regular basis.

The big problem is of course, SRB has painted VS into a corner with his whole anti alliance stance.

Now if the powers that be can keep him quiet for a few months here is what I see.....

LH through BD have a lot of LHR slots.

BD is returning their 330's.

VS has a lot of aircraft coming in the new few years, routes and slots are needed for these aircraft.

Vs does not have the money to go into the open market to buy the slots.

UA/CO are doing their annual merger dance.
Both carriers would love to have more fed to/from London.

LH/UA have ATI already, BA/AA - DL/AF could not say a thing about VS joining LH/UA without putting their own ATI at risk.

SO here is what I kind of see happening.

As the 330/787's come on line, LH leases it's BD slots to VS for use on new mid-haul slim routes, more of the ACC type places.

BD becomes a strictly hub to hub carrier, except for MAN etc in the UK

VS enters the UA/LH ATI group

Entry into STAR.

And if mixed mode runway use comes about then it will add c. 300 take-off / landing slots per day, rendering all of the above unnecessary.

Though the Government rejected mixed mode as part of its approval of the 3rd runway at LHR citing the concerns of residents and them being able to have a break from noise.

What the Conservative view on mixed mode is I don't know.

[Scrooge]

I thought they had said no to that as well.

On top of that, the 3rd runway was supposed to be a short thing for regional flights, so no more long haul slots coming open.

These rumours do seem to be coming up with a lot more frequency of late. Surprisingly, given VS' links to *A carriers, a lot of chatter has been about Skyteam. Personally I do not see VS joining Skyteam anytime soon, it would go against all the airline relationships they have built up over the years. Prior to CO joining *A maybe I could have seen it but not now, especially when one considers that (knowing SQ) there must be some sort of contractual clause that stops VS joining a rival alliance to the one it is in.


So *A still seems the safest bet for me if VS join an alliance. Dave is right, SRB does not help the situation at times like these.

As has always been the case, VS need slots from LHR to be able to make a go of things with new routes/aircraft. VS cannot do what it used to do, which was put routes to LGW in the mid 90's when it could not get hold of LHR slots. With all US carriers being based ex LHR, it would be a joke if VS started a new non leisure route from LGW. Therefore slots are the vital thing.

It is still unclear exactly how LH want to use BD and their slots. There does seem to be a tendency to use BD slots (whether operated by LH or BD) to make LH a better "German" carrier....by that I mean LH has used BD to open up routes into Germany, which will of course make LH look better in its home land. LH have done the exact opposite to what they have done in Italy with their LH Italia arm.

Certainly I agree with Dave, it seems the penny is finally dropping at Crawley that they need to have a very good relationship with more than one carrier, or join an alliance to make the most of their future plans.

Scrooge - Who knows what they are thinking (especially with the ridiculous way they handled the BA strike question in Parliament today which resulted in several of them being told off by the Speaker and being ruled out of order). Even Boris is backtracking on his island airport idea. They want the high speed line to go to LHR but without factoring in the extra time the trains will have to stop there for which reduces the whole high speed concept !

But less of politics.

My understanding was that LHR is basically full and operating at 99% runway capacity - and probably well over 100%+ in terms of what the terminals were built for in terms of pax numbers etc.

Any delay (let alone fog or an incident) has major knock on effects. AMS, FRA and CDG operate at something like 75% capacity so have the flexibility to cope when there is a crisis. Having more than two runways obviously helps with that too! Even JFK (just about) has the capacity to shut its main runway for 4 months for major work because it has three others to soak up the traffic

There is only so much tinkering that can be done with LHRs capacity. It's not just runway access but as we have seen in TRs there needs to be access to gates etc and the need for pax circulation space / facilities and security etc.

I did think that the new 3rd (shorter runway) would be used to take the smaller planes off the main runways therefore increasing reliability for the big planes and providing some flexibility so that if e.g. a main runway was out of action the smaller planes could still operate as normal. There would be a small increase in take offs and landings but the capacity of the 3rd runway would just allow the flexibility LHR needs.

Somehow, (and I may have this wrong) the 3rd runway has become ALL additional capacity for extra flights and not to provide the capacity to bring the operating % down to a sensible level.

That said I suppose that if the regional flights were moved to the 3rd runway (if built) then slots would be opened up on the main runways - but there is still the problem of the terminal capacity etc.

How this would affect VS I have no idea - even if the process started today it would be something like 2020 before the runway was open so its not a quick fix.

Now if BA/AA were forced to give up a far greater number of slots as part of their deal that would be a different matter - that could give VS additional international opportunities.

[Scrooge]

I don't know, there is just something that tells me LH isn't just going to hand those slots back, so what are they going to do ?

Well VS has ties with BD and CO.

UA has pretty much gutted it's LHR routes.

VS has aircraft coming and the 744's/346's are staying, so there has to be expansion somewhere.


You tie the two toegether and you have VS partnering up.

Of course it's all pie in the sky.

VS has what currently, 35 active aircraft (6 343s, 17 346s and 12 747s) with ten A333s to come from 2011 (five and in 2012 another five) and fifteen B787s from what, 2015 or after - then let's not forget (nor expect) six A380s from 2014.

Here are some more questions:
- having dispatched one 747 and parked two 346s cancelled the second HKG and IAD and canx ORD appart from a few months in the summer where does that leave current slots? I know VS leased some from UA and maybe they have gone back - or VS may be leasing some to another airline currently (or relying on LHR's relaxing of the rules on utilizing slots currently) - so there may be some slots free right now
- some of the new orders are to retire the 343s so let's say six of the A333s will replace 343s, that means no slot expansion
- we all assume that some new aircraft will ease the loads at LGW, MAN and GLA - a smaller aircraft might sustain more flights from the north for example to make GLA-MCO a year round operation ...

So for a few years at least, more LHR slots may not actually be necessary, maybe even for four more years?

In that time Open Skies II is supposed to come into effect and VS and VX could officially tie-up. All sorts of things might happen, runway 3 might be cancelled and mixed mode use at LHR come into effect.

I'm not sure I yet see a compelling reason for VS to absorb the high cost of joining *A.

VS cannot do what it used to do, which was put routes to LGW in the mid 90's when it could not get hold of LHR slots. With all US carriers being based ex LHR, it would be a joke if VS started a new non leisure route from LGW. Therefore slots are the vital thing.

- some of the new orders are to retire the 343s so let's say six of the A333s will replace 343s, that means no slot expansion
- we all assume that some new aircraft will ease the loads at LGW, MAN and GLA - a smaller aircraft might sustain more flights from the north for example to make GLA-MCO a year round operation ...

I wonder if we are missing something.

- VS has just invested in the Gatwick clubhouse.
- Gatwick has new owners that have publicly stated they want to attract new or more business.
- There was talk of moving MCO flights to Sanford presumable to save on costs.(so they are prepared to look at other airports)
- I would assume the operating costs out of Heathrow are amongst the highest in the world.

Factoring in the connecting flight debacle that seems to be happening with BMI at LHR (LGW has BA and EasyJet don't know of any others)

Maybe major expansion at Gatwick is the future (or indeed MAN or GLA)

Just my thoughts

David