British Airways, American Airlines and Iberia Near Deal for an Expanded Alliance
European antitrust regulators on Wednesday took a step toward approving an expanded alliance between British Airways, American Airlines and Iberia after the airlines offered to give up landing and takeoff slots at airports serving London and New York.
The European Commission said the three airlines, all members of the Oneworld alliance, had offered to cede slots at Heathrow, Gatwick and Kennedy Airports.
That concession was aimed at lowering barriers to entry for other airlines to fly from London to New York, Boston, Dallas and Miami — routes where British Airways and American Airlines currently dominate.
The commission said it would be seeking comment from interested parties on the settlement until April 10, normally a sign that the regulator itself considered the offer satisfactory. The United States Transportation Department gave preliminary approval to the arrangement last month on the condition that British Airways and American cede four pairs of takeoff and landing slots at Heathrow.
The European settlement would force the airlines to yield more slots at Heathrow — six rather than four.
Even so, Richard Branson, president of Virgin Atlantic, one of British Airways’ main competitors, reiterated his opposition to the deal, calling the proposed concessions “woefully inadequate.” In a statement, he said that a combined British Airways and American would have 47 percent of the slots at Heathrow, one of the busiest European hubs.
The commission began an investigation nearly a year ago over worries that combining the airlines’ services would limit competition and raise fares on some of the world’s most frequently traveled routes.
Similar trans-Atlantic partnerships are already in operation among four members of the Star Alliance — Lufthansa, Continental Airlines, United Airlines and Air Canada — and the SkyTeam members Air France-KLM and Delta Air Lines, which absorbed Northwest Airlines last year.
The European Commission is still investigating the Star Alliance and SkyTeam arrangements.
Under the settlement offered to European regulators, the airlines would make slots available at Heathrow or at Gatwick for competitors to serve the routes to the four American cities, the commission said.
The commission also said that the settlement offer would allow passengers flying on airlines other than British Airways, American Airlines and Iberia to earn frequent-flier miles with programs offered by the three airlines. It also said a trustee would be appointed to monitor such an agreement.
The British Airways-American Airlines venture is the carriers’ third attempt in recent years to win approval for a closer partnership. Other efforts, in 1997 and 2002, were abandoned after the airlines rejected as too onerous a requirement that they give up as many as 16 daily takeoff and landing slots at Heathrow.
But the market for trans-Atlantic air travel has changed in recent years, allowing the current deal to go forward with fewer concessions of slots than regulators demanded in the past, said European Union officials who spoke anonymously because the arrangement had not been completed.
Unlike in the past, when American Airlines and British Airways sought to form an alliance, Continental, Delta and the British airline B.M.I. now offer services, the European Union officials said.
AirAsia Promotion cheap flights to Malaysia from Stansted
A new airline promising bargain flights from the UK to Malaysia plans to take off in the new year.
AirAsiaX, a subsidiary of Malaysian no-frills carrier Air Asia, intends to launch five flights a week to Kuala Lumpur from London Stansted on March 11.
It is promising return tickets to the Malay capital for under £200 – including taxes. Everything else, including food and water on a 12-hour flight will have to be paid for, with meals costing between £5 and £7.50.
AIrAsiaX arrives on the scene during one of the most turbulent periods in aviation history. Over 20 airlines have gone bust during the last year, including Oasis, a carrier which tried to crack the London to Hong Kong market by offering cheap fares.
Tony Fernandes, the Malaysian entrepreneur behind the project, is confident his airline is unlikely to suffer the same fate because it will be part of an established no-frills brand with routes across the Far East and Australia.
He said: “We have 86 aircraft and are already carrying 20 million passengers a year in Asia. This means we can undercut existing operators on some of the most profitable routes, such as London to Perth (via Kuala Lumpur).”
He added that passengers on the Air Asia’s flights from Malaysia to Australia – which can last as long as eight hours – have accepted the principle of having to pay extra for food.
“We are not denying you something you get for free on other airlines, because they really include food as part of the ticket price.”
New Flights Boost For 2008 Minorca Vacations
With official figures some way off, the general feeling in the hotels and holidays trade is that, like Majorca, an increase in the number of visitors compared to 2006 is likely.
But privately run companies often have a quicker gauge on market trends than government bodies, and easyJet, one of Europe’s best known airlines, has begun a new route to Minorca from the island’s important UK market. The new route flies from Newcastle in cheap land for sale north-east of England to Minorca’s capital Mahon, and some 5000 holiday makers were thought to have used the service for their 2007 summer holidays. The Newcastle service to Minorca is in addition to the airline’s existing flights in the UK to the island from London’s Gatwick Airport, Liverpool and Bristol.
In a further boost for Minorca, this time from the financial services sector, one of Britain’s best known banks and mortgage provider is to open three new offices on the Spanish islands of the Canaries plus Minorca to meet demand for Britons looking to buy a home in Spain.
The decision by the Halifax was taken from data showing a trend towards Britons buying homes overseas, with Spain the most popular choice.
Part of the decision was to open in Minorca, the quietest of the three Balearic Islands. Commenting on the move a local travel guide said:
‘While Majorca and Ibiza are possibly better known than Minorca, it’s perhaps not so surprising that the bank has decided to open an office on the island. The typical for property in Minorca is normally older than that for Majorca and Ibiza, which could mean they are hoping to service their investments and pensions along with a normal account – especially for those moving full time to Minorca.’
Commenting on the new bank branch in Minorca, the bank said that the opening of branches away from mainland Spain is an important step in the development of their branch network, and that they will continue to target the Spanish islands in addition to their Spanish mainland business.
Once bought, Minorca villas are often let out to holidaymakers, with the season generally running from May to end September.
The three Balearic Islands of Minorca, Majorca and Ibiza might be close to each other, but they are all different in character and the type of tourist they typically attract.
A surprise is that the amount of time spent on Ibiza by each tourist is longer than on Minorca and Majorca – destroying the myth that Ibiza is primarily for long weekends or short trips for a couple of nights in the club.
Recent findings by the Balearics Tourist Authority show that after Ibiza, Menorca visitors stay on average for 11 days, with Majorca just behind. And the same pattern emerges for spending per day, with Ibiza top, Majorca second, and Minorca last.
The amount spent by Ibiza tourists averaged 94 Euros a day – a huge contribution to the island’s economy, looked on enviously by Majorca and Minorca. But with new banks and flights Minorca might be starting to catch her sisters up.
German Airlines, Lufthansa ‘to Tweak’ Austrian Airlines Offer
The leading German airline, Lufthansa, will improve slightly its offer for Austrian Airlines, raising it to 4.49 euros per share from 4.44, a spokesman said on Tuesday.
Lufthansa seeks to acquire at least 75 percent of AUA, by buying the state’s 41.56 percent stake for a symbolic amount of 366,000 euros (512,000 dollars) and through a public offer for the rest worth a little more than 215 million euros.
A Lufthansa spokeswoman told AFP that the initial price of 4.44 euros per share that was offered early this month was a provisional figure pending examination by the Austrian commission overseeing the AUA stake sale.
The shareholders group IVA had also estimated that Lufthansa’s initial offer was insufficient and had called for an increase.
Air France-KLM, which had also sought to buy the Austrian carrier, has filed a complaint with European Union authorities against Lufthansa’s operation.
The Franco-Dutch airline claimes that Austrian officials have agreed to absorb 500 million euros worth of AUA debt, which could violate EU competition regulations.
Indian Airlines Cancel Aug 18 Domestic Flight Stoppage
India’s private airlines have called off plans to halt domestic travel for one day on Aug. 18 because of fears of a backlash and after the government agreed to talks about high taxes and airport fees, an industry group said.
The Federation of Indian Airlines, which has 10 member airlines including heavyweights Kingfisher and Jet Airways, said in a statement Sunday that the boycott had been canceled “in view of the agitated public sentiment and potential inconvenience to thousands of passengers on the one hand and Government’s willingness to enter into dialogue on the other.”
After federation members announced their intention to strike Friday, Civil Aviation Minister Praful Patel warned that the government would take “appropriate action” if private carriers inconvenienced passengers, the Press Trust of India reported.
FIA says Indian airlines together lost 100 billion rupees ($2 billion) last fiscal year due to high fees and taxes, falling passenger numbers, and rupee depreciation which has made it more costly to lease and maintain aircraft.
The group has been lobbying the government to cut fuel taxes, which make airline fuel costs 60 to 70 percent higher than international norms, according to the Center for Asia Pacific Aviation, an independent research group.
