Posts Tagged ‘Heathrow’

IAG to increase Heathrow presence through BMI acquisition

Friday, December 23rd, 2011

British Airways parent International Airlines Group looks set to increase its dominance at Heathrow Airport after Lufthansa agrees a £172.5 million deal to sell BMI to the airline. The takeover will now be subject to an examination by the competition regulators, but if allowed, the deal will see IAG acquire an additional 56 landing slots at one of the world’s busiest airports.

Sir Richard Branson, boss of Virgin, has said that he will attempt to block the deal going ahead. Virgin had also signed an agreement with Lufthansa to bid for the troubled airline. Branson said that if IAG were to increase its monopoly at Heathrow it would be damaging, not only to the airline industry and consumer choice, but to the UK as a whole.

IAG chief, Willie Walsh, said that he intends to drastically restructure the airline over the next three years. He added that this would inevitably lead to some of BMI’s 3,600 workers becoming redundant.

Since acquiring BMI, Lufthansa has failed to turn a profit from the Castle Donington-based carrier, and said that in 2010 the airline made a loss of £153 million. Both AIG and Lufthansa are hoping that the tie-up will be completed in the first quarter of next year.

Although the competition authorities in Europe have blocked airline mergers in the past, they have usually done so because there is a potential loss of competition on routes, rather than an increased presence for a carrier at a particular airport. IAG will see its slot allocation rise well above 50 per cent at Heathrow if the deal goes ahead.

Fog clears over London airports

Tuesday, November 22nd, 2011

Flight delays and cancellations at airports in the South East appear to have come to an end as the weather improves and the fog lifts. Flights to and from London were disrupted over Sunday and Monday as much of the city experienced poor visibility.

London Heathrow reported that 104 arrivals were cancelled, along with 120 departures. At London City Airport 13 arrivals had to be cancelled on Monday along with 18 departures. Although the fog has now lifted, along with restrictions, passengers are being asked to double check that services are running with their carriers.

Heathrow, which sees some 1,300 flights pass through each day, confirmed that restrictions on flying were no longer in place. A spokesman at City said the same thing. On Sunday, airlines at Heathrow dealt with the problem of stranded and delayed passengers by booking them on to alternate services, putting them up in hotels and sending some of those who were booked onto domestic flights to their destinations on coaches.

Airline customers said they could understand why services were delayed by poor visibility caused by the bad weather, but said it was frustrating that passport control and immigration were taking so long to process passengers.

A spokesperson for the UK Border Agency said that efforts had been made to bring extra staff in to help deal with the backlog and clear passengers through the airports as quickly as possible. Eurocontrol, the body in charge of flight management across Europe, said that fog had caused issue at airports including Amsterdam, Oslo and Paris.

Boris Johnson backs plans for Thames Estuary airport

Thursday, November 3rd, 2011

Plans for a new airport in the Thames Estuary have been referred to as the solution to the aviation crisis in the South-East by Mayor of London Boris Johnson. The design is the work of architect Lord Foster, who said the four-runway hub would put Britain back in a dominant position in terms of world trade. The proposal involves a high speed rail link being built between London and the airport. Lord Foster claims that the estuary hub would be able to cope with 150 million passengers every year.

The proposed site for the airport is the Isle of Grain. The plans include building a connecting tidal barrier across the river, which supporters say would be an added benefit. New land would also be created for business development.

The proposal also includes a railway station beneath the terminal which would be capable of dealing with up to 300,000 passengers daily. Power for the facility would be generated by the North Sea tides, and because aircraft would be landing and taking off over the water, residents would not have the noise pollution problems which are currently a nuisance around Heathrow.

The government has said that airports in the South-East will be at capacity by 2030, but have also said that plans for another runway at Heathrow to deal with the problem will not be allowed to progress.

Detractors of the proposition cite reasons such as the dangers posed by the Isle of Grain’s massive gas facility, and the fact that the island is home to millions of migrating birds as reasons why the plan should not go ahead.

New Transport Secretary not neutral claims Willie Walsh

Monday, October 17th, 2011

Former British Airways boss, and current CEO of International Airlines Group, Willie Walsh, has accused Prime Minister David Cameron of appointing new Transport Secretary Justine Greening as a fireguard against an aviation policy which is detrimental to the British economy. Ms Greening has taken over the top transport position after Philip Hammond filled that vacancy of Defence Secretary left by Liam Fox on Friday.

According to sources at IAG, Mr Walsh is concerned that the MP for Putney will have a conflict of interests. The south-west London constituency is on the flight path to Heathrow. Ms Greening has been a campaigner against any expansion at the UK hub.

Mr Walsh wants to see capacity increased at Heathrow through the construction of a third runway. However, the government, which is presently examining aviation policy, has said that there will be no expansion. The transport department is looking into creating a high-speed rail link between Gatwick and Heathrow which it claims will create a virtual hub.

Mr Walsh recently spoke out against the proposed scheme saying that it would be too expensive and could take years to complete. He has always said that expansion at Heathrow would be funded by airlines, not the tax payer.

Separately, IAG said that Mr Walsh was planning to contact Ms Greening to ask her to do away with air passenger duty. The controversial tax has been blamed for a fall off in tourist numbers and is also said to be damaging business in the UK.

Heath-wick high speed rail link plans revealed

Tuesday, October 11th, 2011

Ministers are considering plans to link Gatwick and Heathrow airports via a high speed railway service. The idea is to create a virtual hub, currently being called Heathwick, which could help to tackle the problem of diminishing capacity at airports in the south east. The trains would travel at up to 180mph meaning the journey time between Heathrow and Gatwick would be just 15 minutes. The project has been budgeted at £5 billion.

The track, which would mostly be underground, would follow the M25 and could stretch beyond Heathrow to RAF Northolt. Gatwick bosses have said that they welcome the scheme and look forward to examining it further. However, BAA, which owns Heathrow, said there were enormous political, technical and financial hurdles to be crossed.

Ryanair and easyJet said they would oppose the project. Both are worried that if a hub is created then low-cost carriers could be forced away from Gatwick. Ryanair boss, Michael O’Leary, dismissed the idea as prohibitively expensive and predicted that it would not be constructed in his lifetime.

Willie Walsh, CEO of International Airlines Group, British Airways’ parent company, said it was almost impossible to say how much the Heathwick project would cost or how long it would take to complete. He added that the government could end up regretting not going forward with constructing another runway at Heathrow.

Boris Johnson has said he will support further examination of the Heathwick proposals. However, the mayor added that he still thinks the best way of increasing capacity in the south east is through the building of a brand new Thames Estuary airport.

Virgin contacts regulators over BA Heathrow slots

Tuesday, September 27th, 2011

Virgin Atlantic owner, Sir Richard Branson, has said that he will consult with regulators about British Airways’ decision to purchase six landing and take-off slots from troubled BMI at Heathrow. BA is already holds more slots than any other airline at the London hub by far. According to a statement made by Virgin, Sir Richard is concerned that BA is looking to strip the key assets from BMI which will result in unattractive leftovers being put up for sale.

The Virgin boss has been interested in BMI for about a decade and the airline said its interest had been renewed after owners Lufthansa recently announced that they were looking for a way of disposing of the British carrier.

Virgin said it had not entered into the bidding for the six Heathrow slots because it understood that they were being leased, not sold. BA has since announced that it has purchased the slots.

The European Commission and the Office of Fair Trading will now be asked by Virgin Atlantic to become involved in the matter. A spokesman for Lufthansa said the German flag carrier was still examining a range of possibilities for the disposal of BMI. He added that the sale of the slots to British Airways had not affected the value of the carrier because they were not part of its core activities.

Lufthansa has declined to say whether it is in negotiations with any airlines over selling further slots at Heathrow. BMI has been a loss maker since Lufthansa took control in 2009.

BA expands presence at Heathrow with BMI slots

Friday, September 23rd, 2011

British Airways has done a deal with BMI for an undisclosed amount to acquire six of the troubled airline’s valuable landing- and take-off slots at Heathrow Airport. The agreement means that IAG, parent of the UK flag carrier, now commands 45 per cent of the capacity at the London hub. In a short statement, BA said that by the end of next month it would be expanding both its short- and long-haul operations using the new slots.

By agreeing to part with what is its most valuable asset, BMI has indicated that owner Lufthansa is looking to break up the British-based airline rather than try and find a buyer. Since being forced to take control of BMI in the middle of 2009, Lufthansa has tried to restructure it but has continued to incur heavy losses.

According to Echelon Research & Advisory analyst, Chris Logan, BMI is a loss maker without a strong brand so it makes sense for Lufthansa to try and dispose of its Heathrow slots. Since 2009, BMI has recorded operating losses of some 223 million euros.

A British Airways spokeswoman said that the airline was still looking to expand its capacity at Heathrow, one of the busiest airports in the world. Three years ago, the value of having slots at the London hub was illustrated when US carrier Continental Airlines finalised a deal to buy four pairs for $209 million.

According to Stefanie Stotz, a Lufthansa spokeswoman, BMI’s current flight schedule will be unaffected by the deal with BA.

Heathrow failing to take advantage of emerging markets

Thursday, September 22nd, 2011

A new report commissioned by the company which operates Heathrow suggests that the airport is falling behind other European hubs when it comes to connecting directly with cities across the emerging markets. According to chief executive of BAA, Colin Matthews, the annual cost to the UK for its lack of direct connections already stands at £1.2 billion.

He said that as the world economy continued to shift, Britain should be working towards forging better links. As he sees it, if the country continues as it is, the UK could become an island cut off from the most important markets on the planet.

The analysis was undertaken by Frontier Economics. The results suggest that over a decade lost business could cost as much as £14 billion. The study claims that 21 destinations in the emerging markets, including Jakarta, Guangzhou and Manila, are already being served from other airports around Europe on a daily basis which are not directly served by London’s main airport.

The report also says that Frankfurt and Charles de Gaulle are flying 1,000 more services to China’s three biggest cities every year than Heathrow was managing. The findings have been disputed by Heathrow expansion opposition Hacan Clearskies. Chairman John Stewart said Heathrow currently has more services flying to the world’s most important business destinations than Frankfurt and Paris Charles de Gaulle combined.

Increasing capacity by adding a third runway at Heathrow has been ruled out by the government. Mayor of London Boris Johnson’s idea for a Thames Estuary hub has also been dismissed.

Virgin Atlantic declares interest in BMI deal

Wednesday, September 14th, 2011

As German flag carrier Lufthansa looks at ways of disposing of BMI, Emirates confirms that it is not interested in acquiring the loss maker. A spokesman for the Middle Eastern giant said that although Emirates is looking to continue expanding, it is not currently looking to do so by purchasing another carrier. Etihad, also rumoured to be interested in the British airline, has said it will not comment on speculation.

Earlier in the week, British Airways said it would be interested in talking to Lufthansa about taking over BMI’s landing and take-off slots at Heathrow. However, because BA currently owns 44 per cent of the capacity at the London hub, there could be some monopoly issues.

Virgin Atlantic has also said it might be interested in a tie-up with BMI.  A deal could help Virgin as it competes with British Airways on transatlantic routes. The British flag-carrier recently tightened up its relationship with American Airlines.

Although it is yet to comment, Air France is also reportedly interested in BMI. Lufthansa has been trying to turn the carrier’s fortunes around by concentrating on flying services on the oil routes. This includes flights out of Heathrow to Russia, The Middle East and Scotland. Unfortunately for BMI the social and political problems in the Middle East have impacted on its earnings.

For the first half of this year, BMI made losses of 120 million euros. The first six months of 2010 saw the carrier lose 93 million euros. Lufthansa has said that any improvement at the moment looked unlikely.

Currency sales increase in 2011 for long haul destinations

Wednesday, September 7th, 2011

A recent survey by the Post Office has revealed that UK holidaymakers have been attracted by long-haul destinations this summer, as the demand for currency to countries such as Mexico showed a sharp increase. Cheap, all-inclusive deals to Mexican resorts such as Cancun saw demand for the currency jump by 144 per cent over the past 12 months. Travel to Cancun may also have been encouraged by the fact that British Airways now offers a direct service from Heathrow.

Croatia also seems to have been a popular choice for a summer holiday, as demand for the kuna in August rose by 36 per cent and saw an increase in demand of around 15 per cent over the three months from June.

The survey also showed that there was an increase in demand for destinations including Thailand, Barbados and Australia. Earlier this year, British Airways also added direct services to Buenos Aires which may in part account for increased sales of the Argentine peso.

The Post Office’s Sarah Munroe said this year had again seen destinations farther afield encouraging visitors from the UK. She added that August saw the highest levels of growth and that this could indicate that there will be strong demand over the coming months from customers seeking some winter sun.

Closer to home, Switzerland and Iceland saw strong demand from Brits for their currencies, and sales of the euro were up by two per cent on June to August last year; through August demand increased by five per cent.