Emirates adds 6th daily A380 flight to Heathrow, and Oman Air breaks slot price record
Heathrow slots are very much in demand, from airlines across the world, especially those at key times of day – such as early morning. Now Oman Air has set a record by paying $75 million for a pair of take-off and landing slots. It has one pair already. The small airline is understood to have bought the pair — which includes a highly prized early morning arrival — from Air France-KLM. The price beats the $60 million paid by American Airlines a year ago, for a slot bought from the Scandinavian carrier SAS. It is understood that Air France also sold another slot for a lower price to Emirates. That means Emirates will have six daily flights to Dubai from Heathrow, and it will use the slot for another A380, starting summer 2016. The slot bought by Oman Air is for a [popular with those over flown in London] a 5.30am arrival from Muscat. Heathrow slots have been changing hands for ever larger amounts of money recently. They are best value for lucrative flights to the USA and for fast-growing Gulf airlines wanting to get passengers through their Middle East hub airports. Last year Virgin Atlantic mortgaged its portfolio of Heathrow slots to raise £200m in a bond issue. The Sunday Times comments that “The high prices commanded by Heathrow may also reflect doubts among airlines over whether the airport will ever get a third runway.”
Emirates adds sixth daily flight to Heathrow, Oman Air breaks slot record
Oman Air buys Heathrow slot for record $75 million: report
14.2.2016 (Gulf News)
By Alexander Cornwell
Dubai: Emirates is adding a sixth daily flight to London Heathrow starting March 27 in “direct response to continued strong demand,” the airline said on Sunday.
But Emirates is not the only one in the Gulf adding flights to one of Europe’s busiest hubs. British newspaper The Sunday Times reported on Sunday that Oman Air has bought a pair of landing and take-off slots at London Heathrow for a record $75 million (Dh275 million) from Air France-KLM. [It now appears, 2.3.2016, that the slot was bought from Kenya Airways, not Air France. Link].
Oman Air previously had a spat with Air France over landing rights at its hub Paris’ Charles de Gaulle airport while also seeking closer ties with KLM. Oman Air didn’t respond to a request to comment on The Sunday Times report, which stated that the airline beat the previous Heathrow slot purchase record of $60 million.
Meanwhile, the new Emirates flight to Heathrow will initially be operated by a Boeing 777-300 ER (extended range) departing Dubai at 11.30am and arriving in London at 4.10pm, an airlines spokesperson told Gulf News by email, confirming reports in The Sunday Times. The service will be upgraded to an Airbus A380 on June 1.
The British paper said that Emirates bought the slots off Air France at a “lower price” than what Oman Air paid.
Kenya Airways sells its only Heathrow slot
News has emerged that it was Kenya Airways who sold Oman Air its prized early morning slot at London Heathrow. Initially it was reported that Oman Air acquired the slot from the Air France/KLM Group.
The slot in question raised the record sum of US$75 million (see news, February 25, 2016).
Kenya’s national airline is in dire financial straits. And its falling passenger numbers have obliged it to reduce capacity.
It has raised cash both from the slot sale and by trimming its fleet.
Its new B777-300ERs, which were serving London until last September, (see Tried & Tested, July 11, 2015) have found a home at Turkish Airlines while two of its factory-fresh B787s have been leased to Oman Air.
But Kenya Airways is not quitting London’s premier airport.
How? Because according to local media, Kenya Airways will lease (rather than own outright) its Heathrow slot from KLM (with 26 per cent shareholding in Kenya Airways).
It means that Kenya Airways will (once the new slot times take affect) be paying KLM a fee every time its B787 lands and takes off from Heathrow.
Kenya Airways new slot times come into effect later this month.
Currently both Nairobi-London and London-Nairobi flights operate to overnight timings with the aircraft spending all day on the ground at Heathrow.
But revised schedules from March 27 mean the airline will operate a daylight flight to London returning overnight to Nairobi.
This will call for a slick 2 hrs and 10 mins turnaround at Heathrow.
The daily flight is operated by a B787 but inbound timings will not be so popular with business people as the latter prefer overnight services.
Air France struggles to make big cost cuts
By Michael Stothard in Paris
Some analysts and company insiders say flag carrier risks becoming second-tier player
There are not that many senior management jobs in Europe where one could reasonably ask for hostile environment training, but human resources director at Air France is one of them.
This month a tense employee meeting at the French flag carrier turned violent when Xavier Broseta, the HR director, was descended on by an angry mob who tore off his shirt and forced him to flee half-naked over a fence.
The French government quickly denounced the attackers, who were protesting against proposed job losses at Air France, which has been struggling to compete against more nimble rivals. “Today’s challenge is Air France’s survival,” said Manuel Valls, French prime minister, immediately after the incident on October 5.
But since Mr Valls’ endorsement of major change at Air France, the government has backtracked. With labour relations at a low point, analysts and some people close to the company are concerned that Air France could proceed with half-baked efficiency reforms that do not improve its ability to compete sufficiently.
This in turn increases the risk that Air France is consigned to being a second-tier player in the global aviation industry. The company’s glory days of operating Concorde and blazing a trail in European airline mergers — by combining with KLM of the Netherlands in 2004 — are an increasingly distant memory. After four consecutive years of net losses, shareholders appear to agree: Air France-KLM’s stock has underperformed sector peers as well as the CAC 40 index over the past six months.
………. and it continues (£) ……… at
Scandinavian Airlines sells a 2nd pair of Heathrow slots – now leaving it 19 pairs (after October)
In February, Scandinavian Airlines (SAS) announced that it was selling one of its 21 slot pairs at Heathrow, to an unknown buyer airline, for perhaps $60 million, from 29th March. SAS said they would be maintaining their seat capacity to/from Heathrow through the use of larger aircraft on remaining flights. Furthermore, SAS saidit would consider the use of other London airports instead. SAS holds the 5th highest number of Heathrow slot pairs. It has now also announced that it is to sell another slot pair,leaving it just 19 pairs, to Turkish Airlines. This sale will take place from 25th October, and is an afternoon slot – which is less expensive at around $22 million, than the earlier sale, of a morning slot. SAS is not thought to want to sell any more slots. ATW has reported that “Over recent months, Virgin Atlantic has said it was looking to lease out two of its Heathrow slot pairs, while now-defunct Cyprus Airways missed out on a deal to sell some of its slots to Qatar Airways.” But Cyprus Airways sold a slot for $31 million in June 2014.
Sunday Times reports “BA cancels flights to tighten grip on privileged Heathrow position” by slot use
The Sunday Times reports that British Airways has admitted it plays the system at Heathrow by “tactically cancelling” flights so it can hang on to lucrative landing slots without needing to fly more planes. BA has about 50% of Heathrow’s take-off and landing slots, and it could have 53% by next summer. It has done successive deals to obtain more slots, such as its 2012 takeover of BMI, and getting 11 pairs of slots following the closure of Virgin Atlantic’s Little Red service to regional airports, and the collapse of Russian carrier Transaero. Most of these slots had been mandated for use on UK routes, as part of a European competition ruling on the BMI takeover.But BA can now use them as it wants, after the failure of the two rival airlines. In the rules that govern how landing slots are used, airlines have to use them 80% of the time or lose them to another airline. Airlines that owns lots, which can be valued up to £40 million, are not keen to lose them. BA is using “tactical cancellations” across their network, so they can keep the 80% rule,without much overall increase in capacity. BA cancelled a daily Heathrow flight to New York, and some short-haul routes and will launch new routes, mainly to leisure destinations in Europe. While BA’s tactics are within the rules, they raise questions about whether Heathrow’s runway capacity is being used effectively.