FlyerTalk Forums - View Single Post - BA acquires right to buy 85% of Aer Lingus's LHR slots
Old Dec 15, 2012 | 5:08 am
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orbitmic
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Originally Posted by Dan72
I'm not sure the deal would be good, but I think your analysis is a touch naive. It's clear that Ryanair would have to open up the LON-DUB route if it has any chance of taking over EI. FR have also said that they would not operate out of LHR. So BA know there is a prospect of of EI LHR's slots coming on to the market. It will make business sense for BA to do what it can to get those slots, as its business is constrained by the size of its operation at LHR.
With due respect, I don't think my analysis was naive: what I was saying was that when competition authorities say that a certain deal will be blocked if a take over results in a dominant position for an airline on a certain route, this will not be solved by selling the purchased airline's slots on this route to an alternative airline which would as a result of the sale become the monopolistic operator on this particular route. The very fact that it would make perfect business sense for BA to be the recipient of the route (specifically because it would consequently become the sole operator on LHR-DUB) is precisely what would undoubtedly make such a deal an unacceptable "solution" for competition authorities. The route has always operated as at least a duopoly in the past (BD and EI, now BA and EI) and downgrading it to a monopoly would lead to the same responses that we made to BA on the LHR-Scotland routes after it purchased BMI. The only realistic solution if FR wants to reassure competition authorities would be to sell the slots to alternative airlines which are currently not operating the routes in question (VS is the obvious candidate unless BE or U2 came as -currently unexpected - surprise candidates) to ensure that offer diversity is maintained once EI disappears.
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