Examination of Witnesses (Questions 580
- 594)
WEDNESDAY 14 JUNE 2000
MR STEPHAN
EGLI, MR
JOHN MOLONEY,
MR HERSHEL
KAMEN AND
MR MICHAEL
CARTER
580. So, do you know what British Airways has
at Heathrow?
(Mr Moloney) About 38.
581. Do you see minor inequity in those figures?
(Mr Moloney) If you look at those figures in a raw
sense, I do.
582. Thank you. Tell us about the proportion
of the total frequencies between the United States and France
that are operated by Delta Air Lines and your alliance partner;
what proportion is what?
(Mr Moloney) Delta operates three to Charles de Gaulle
and one to Nice and one to Lyons.
583. What is the merger between British Airways
and KLM, if it takes place, going to do to you?
(Mr Moloney) It would be difficult for us to speculate.
I would prefer not to speculate about that at this point. If a
merger does come and is signed, I would be glad to come back and
answer that question, but until that is the case I think it is
not helpful for us to speculate.
584. Have you ever, because we have heard evidence
this afternoon, which I suspect you yourselves heard, deferred
a decision about putting a service into a regional United Kingdom
airline, airport, on the suggestion that it might, in some way,
preclude discussion of services to Heathrow or to Gatwick?
(Mr Egli) No. We have daily services from Atlanta
to Manchester, as well as from JFK to Manchester; we have looked
at other regional airports. I think it is pretty fair to say,
the allocation of aircraft is a very, very competitive thing within
a company, we always have to look at other opportunities for—
585. But it has not constituted a hazard?
(Mr Egli) No.
586. How satisfied are you with your services
to UK regional airports?
(Mr Egli) We are very satisfied.
Mr O'Brien
587. Are they making a profit?
(Mr Egli) Yes.
Chairman
588. And Continental?
(Mr Carter) Yes. We operate from Birmingham, Manchester
and Glasgow to New York/Newark. All those services are profitable,
it increases our market share in the United Kingdom, and we have
customers over London which we would not have but for the fact
that we have regional services as well.
Mr O'Brien
589. Have you done any research as to the passenger
mix and the loads out of the regionals, compared with London?
(Mr Carter) Yes. There is a tendency for more UK-originating
passengers out of the UK regions. The business mix is lower, and
there is less, by definition, obviously, yes, less US demand;
however, the US business class traffic is quite strong into the
regions.
590. And Delta?
(Mr Egli) I think, pretty much the same. I have nothing
more to add.
Mr Stevenson
591. Some quick questions about slots. Do you
anticipate that slot allocation and timings would be part of the
negotiations?
(Mr Kamen) We think that, clearly, slots have to be
discussed in the negotiation; we think that signing an agreement
that says anybody, any US or UK carrier, can fly to Heathrow without
a discussion of where the slots are going to come from is a meaningless
discussion.
Chairman: But you have just been complaining
that Governments interfered. Now, if Governments do a deal which
says, in effect, you can fly wherever you like, as long as you
can get in any way?
Mr Stevenson: That is my next question gone
by the board.
Chairman
592. I just have this enormous power of being
able to read his mind.
(Mr Kamen) I did not say that the Government should
allocate specific slots to any carrier, I think there needs to
be an understanding as to what the rules of the game are going
to be. I think there needs to be fair access for both sides to
get any new slots that are created. We support the US Government
in the plan that they have now proposed, which is a self-help
plan, where carriers from both sides would use the normal channels
for accessing slots, in order to add their service; and the old
plan of slot divestiture is something we think that competition
authorities should discuss when they are discussing alliances,
and they do not have a part in an actual bilateral context.
Mr Stevenson
593. So, in effect, if access were gained by
both your airlines, much increased access to Heathrow, if you
had not got the slots it would be useless to you?
(Mr Kamen) Absolutely.
(Mr Moloney) It is just a piece of paper. It is just
open skies without open ground.
594. How then, if you have this open access,
greater access, where are you going to get the slots from, how
do you anticipate getting them?
(Mr Moloney) To follow on from what Hershel said,
about slots, in an otherwise perfect market-place, we would get
them through the normal process, through our partners, possibly
through Air France, through others, that become available; that
is one way we could. Another way is, there is another problem
in this equation, and the problem is, you are putting the number
one and the number two carriers, American and BA, together at
a closed airport. And you said earlier that you were chiding us
that, I said Government should have no role, I did mention that
there are a few instances of safety and predation, problems with
competition. Government does have a role to play as a referee,
we have seen that in many places, we saw it last week with Microsoft,
Government does have a role as a referee to ensure that competition
takes place; and I think that is one way that slots could be made
available. If these two carriers, if you put Coke and Pepsi together,
if you put AA and BA together, at this closed airport, Government
has a role, and I think has a duty, to ensure that competition
takes place, and one of the ways of doing that is to allocate
slots so competition can be maintained.
Chairman: Gentlemen, you have been very patient.
Thank you very much indeed.
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