British Airways might abandon Gatwick, for Heathrow, if 80% slot use rules are reinstated
British Airways has revived plans to abandon Gatwick and concentrate operations at Heathrow, according to industry sources. This is due to fears by BA’s owner, IAG, that it could lose lucrative take-off and landing slots at Heathrow. BA first considered leaving Gatwick more than a year ago in anticipation that demand for air travel will remain depressed for a number of years. The landing slots at Heathrow are very much sought-after and expensive, each costing tens of millions of pounds. Usually airlines have to make use of 80% of their slots, or risk losing them. This was suspended due to Covid, and this waiver was initially due to end in late March. Transport Secretary, Grant Shapps, then extended it, with no given end date. If the waiver is finally ended, then British Airways would want to be sure of keeping its lucrative Heathrow slots, by moving more of its activities there, from Gatwick – where the slots are less valuable.
British Airways revives plans to abandon Gatwick
The flag carrier has launched a review into concentrating its operations at Heathrow
By Oliver Gill, CHIEF BUSINESS CORRESPONDENT (The Telegraph)
19 June 2021
British Airways has revived plans to abandon Gatwick, delivering a fresh blow to Britain’s second-biggest airport.
Airline bosses have launched a review into concentrating the flag carrier’s operations at Heathrow, according to industry sources.
Gatwick has been hit hardest of any European airport due to coronavirus restrictions on international travel, according research by pilots union Balpa, with daily arrivals and departures down by 92pc during the first week of June compared with the same period in 2019.
It is understood that the review of Gatwick follows an order from IAG, BA’s FTSE 100 parent company, which is fearful that it could lose lucrative take-off and landing slots at Heathrow.
BA raised the spectre of quitting Gatwick more than a year ago in anticipation that demand for air travel will remain depressed for a number of years.
Given Heathrow’s popularity, take-off and landing slots are highly sought after and can be traded by airlines for tens of millions of pounds.
In normal times, airlines are required to operate 80pc of the maximum possible flights to retain their slots. Failure to comply would result in slots being handed back to a central authority and reallocated to other airlines.
Grant Shapps, the Transport Secretary, issued a waiver of such “use it or lose it” rules. If Mr Shapps decides not to extend the waiver until demand returns to pre-pandemic levels, BA may need to focus on airports such as Heathrow where the slots are worth the most so that they do not lose them.
Luis Gallego, chief executive of IAG, told analysts last month: “Gatwick is an important decision that we need to take as a group. It’s true that we have the issue with the slots.
“Gatwick has some strategic value, but we need to be competitive there. This crisis is going to change the profile … of the demand. So we are analysing the different options.”
British Airways declined to comment.
Government extends waiver for airline slot use, with no end date
26th February 2021
Move provides aviation sector with much-needed flexibility and protects environment as airlines will not have to operate carbon-inefficient ‘ghost flights’ to retain their slots.
Suspension of airport “80/20” slot usage rule to last till end of March 2021 – Gatwick not happy
Gatwick airport wants the UK and European regulators to reinstate rules that force airlines to use 80% of their lucrative take-off and landing rights, or lose them, before summer 2021. Wingate wants airlines to give back slots they cannot use, so other airlines such as Wizz Air can come to Gatwick, driving down air fares and getting more bums on airline seats (helping Gatwick survive). The European regulations insisting 80% of landing slots are used were suspended for 6 months, from March, due to the decimation in air travel demand caused by Covid. This was done so airlines would not fly empty planes, just to say the slot has been used. The restriction has been extended for another 6 months, to 27th March 2021, as air travel demand will remain very low. There is discussion within the industry if this should continue into next summer, and even industry lobby body, Airlines UK, is in favour of not wasting fuel and generating CO2, with flights by empty planes. Gatwick’s Stewart Wingate wants the UK to do its own thing on the “80/20” slot rule, after it leaves the EU. Several airlines have said they will leave Gatwick, some going instead to Heathrow.
BA shifts short-haul operations from Gatwick to Heathrow
June 30th 2020
British Airways is to move all its short-haul and domestic operations at Gatwick to Heathrow until September. A “small number” of long-haul BA services will fly from Gatwick from mid-July as outbound UK air travel begins to resume, but the bulk of its ex-London programme will fly from Heathrow. BA said the move would cut costs “at a time when demand is yet to return” and travel restrictions remain in place. They say that throughout July and August, we’ll be consolidating our Gatwick and Heathrow short haul flying to operate from our Heathrow base.
Many BA flights for July moved from Gatwick to Heathrow, to rationalise operations there
British Airways is switching many short-haul flights from its second-biggest base, Gatwick, to Heathrow in July. BA has already warned that it may abandon Gatwick permanently, or drastically cut its operations there. For 30 years, Gatwick has been the base for BA’s leisure routes, including Mediterranean, Caribbean, Latin American and Indian Ocean destinations. BA Airways has a majority of the slots at Heathrow, but this summer it will use only a small fraction of them, for its much-reduced international network. The move may help the airline to cut costs, by increasing the efficiency of the operation at its main base, Heathrow. A daytime short haul holiday flight to the Mediterranean can be slotted in between early and late long haul trips, making better use of aircraft and crew. It will also remove some key BA routes from direct competition with easyJet, which is the dominant airline at Gatwick potentially enabling both airlines to increase fares. There may be more BA routes from Gatwick later in the summer, depending on how the Covid pandemic is being dealt with. BA has been described, by the Transport Select Committee, as a “national disgrace” for the way it has treated its staff, forcing them to leave, and then being re-employed on much worse contracts.
Covid-19: Virgin Atlantic to cut 3,000 jobs and shut down Gatwick operations
Virgin Atlantic has announced it is to cut more than 3,000 jobs in the UK and end its operation at Gatwick airport, due to the collapse in air travel demand because of the Covid-19 pandemic. This comes soon after rival British Airways said it could not rule out closing its Gatwick operation. Virgin was Gatwick’s 9th largest airline, while British Airways was the 2nd largest, after EasyJet, which is largest – Norwegian is 3rd largest. Virgin Atlantic said it will move its flying programme from Gatwick to Heathrow, but it intends to keep its slots at Gatwick “so it can return in line with customer demand”. The job losses amount to about 30% of the total (the job losses at BA are 28%). Virgin Atlantic also plans to reduce the size of its aircraft fleet from 45 to 35 by the summer of 2022. Even the lobby group, Airlines UK admits that “Airlines are having to adapt to a sector that will be smaller and leaner in future, with no guarantees as to when we will return to pre-crisis levels.” When lockdown restrictions ease and flight schedules are increased again, there will be fewer passengers, fewer and probably more expensive flights and thousands of job losses. The area around Gatwick was too dependent on the airport for jobs etc.
Gatwick: Likely to take 4 years for passenger levels to recover to 2019 levels (if ever …)
Gatwick has said it will not ask the Treasury for emergency loans despite fearing that passenger numbers will not return to pre-Covid levels for up to 4 years. Gatwick has already secured a £300m loan from existing banks. It has also cancelled dividends, cut a lot of costs and furloughed around 2,000 staff. Boss Stewart Wingate said: “We think it is probably going to take somewhere between 3 and 4 years to get back to the levels that we were at in 2019.” Gatwick hopes it can ride out months of losses, but want to have flights re-starting by the end of May. Unlike rivals, Gatwick said “you should do absolutely everything you possibly can that is within your control to protect the business” before asking for state aid. Gatwick is open from 2-10pm each day, for a handful of flights. Unlike rival Heathrow, which gave out over £100 million in dividends to shareholders in February, Gatwick’s owners will not be taking a dividend despite the airport announcing an 8% rise in earnings of £432m in the 9 months to December 2019. There may not be dividends till 2022. It is possible that British Airways might leave Gatwick in due course.
Airlines, suffering from fewer passengers due to Coronavirus, want relaxation of 80% slot “use it or lose it” rule
The airlines are feeling the effect of the Coronavirus. It is largely by air travel that the virus has spread so widely, and so fast, to dozens of countries. But the impact of the virus is to reduce air travel, either by people being prevented from flying, or others choosing not to put themselves at risk. So flights are being cancelled, and airlines are worrying about their profits. Currently in the UK, and Europe and internationally at large enough airports, the slots are allocated – and there is a “use it or lose it” rule. If an airline does not use 80% of its slots, it risks losing them. Slots can be hugely valuable, at an airport like Heathrow. In the UK the slots are administered by ACL (Airport Coordination Limited). Airlines are now asking that the slot use rules should be relaxed, even just temporarily while the world waits to see how widespread the Coronavirus becomes. IATA has said it was contacting aviation regulators worldwide and requesting the usual rules governing the use of takeoff and landing slots be put on hold. That has been allowed occasionally in the past. Airlines often “cheat” on the 80% rule, flying small planes, or “ghost planes” to keep up the figure.