Open Skies will drive competition at Heathrow, says aviation expert

The new Open Skies aviation agreement, which comes into force today, will open up new competition at Heathrow, according to Deloitte UK’s aviation expert.

Deloitte UK partner serving the aviation industry Graham Pickett said the new agreement, which allows airlines to fly to the US from any airport, will “radically” shake-up the transatlantic market.

Specifically it will cause a scramble for flight slots from Heathrow to the US where currently just four airlines operate between the two.

Pickett said airlines wanting to obtain some of the slots will have to do so by cutting some deals.

He added: “Airlines keen to rival the incumbent players may find it difficult to secure landing slots. Trading in slots, a bit of a grey area in terms of regulation, can be an extremely expensive business, with prime slots potentially changing hands for up to £30 million a pair.

“Alliances between carriers are seen as the best way to open up routes from Heathrow to the US, with members of the Star Alliance looking to British airline BMI, which has the second highest number of slots at Heathrow, to help them.

“All this movement and competition among airlines as they maximize their new freedom is generally thought to be good for the consumer. Logically, if more airlines are competing for passengers on the same route, prices should fall, but these reductions are most likely to favour business class tickets.”

Pickett said some European airlines may benefit from the competition to secure Heathrow landing slots, adding: “With strong competition for landing slots in Heathrow, the focus may switch to other major European hubs and there is a possibility of more joint ventures as carriers try to take a larger slice of the transatlantic market.

“Airlines with strong brands may launch new flights from other European airports in a bid to entice passengers away from their rivals.”

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.