Carriers vie for Heathrow slots

24.6.2008   (Financial Times)

By Kevin Done in London

Etihad, the Abu Dhabi-based airline, and Kingfisher Airlines of India are negotiating
deals to gain access to more take-off and landing slots at London Heathrow.

Long-haul carriers are taking over more of the prized slots at Heathrow from
short-haul services as widebody jets replace smaller aircraft and some incumbent
carriers seek to cash in on the slot trade. The trend is allowing passenger numbers
at Europe’s most congested airport to grow without an increase in flights.

Etihad has reached agreement with Luxair to lease the Luxembourg carrier’s two
pairs of slots for five years for £9m ($17.7m). Luxair also has a put option to
sell the slots to Etihad at a pre-agreed price, and the Middle East carrier has
a right of first refusal on a future sale.

Etihad said it was seeking to expand at the world’s busiest international airport.
The deal would come into effect in late October.

It will allow the fast-growing Etihad to double its presence and have consistent
arrival and departure times for three flights a day from Abu Dhabi. It said it
was seeking further deals in the next two to three years to build its slot portfolio
at Heathrow to allow it to operate five flights a day from Abu Dhabi.

Luxair is expected to announce this week it is withdrawing from Heathrow, to
which it operates using small regional jets, and will concentrate its services
instead from the winter season at London City airport.

Separately, Kingfisher is expected to make Heathrow its first long-haul destination
when it starts international flights from India this year.

It has obtained an initial pair of slots from the Heathrow co-ordinator, but
is negotiating to take over a second pair of slots from KLM. The Dutch subsidiary
of Air France-KLM said it planned to suspend its Rotterdam-Heathrow service in
order to lease out the slots. It was seeking "to maximise its slot portfolio"
and was "talking to various parties".

In the past year it has given up its Heathrow-Eindhoven service and cut its daily
flights to Amsterdam to make slots available to its Northwest Airlines, its US
partner, for new daily services between Heathrow and Detroit, Minneapolis and

There are almost no free take-off and landing slots at Heathrow and demand has
been high during the past 12 months as airlines have sought to take advantage
of the US/European Union "open skies" treaty to liberalise transatlantic aviation.

Continental Airlines of the US set a record for Heathrow slot prices last year
when it paid $209m for four pairs to start twice-daily services from Houston and
New York Newark.