TRAVEL NEWS

Three major U.S. airlines begin flights into Heathrow

Delta, Continental and Northwest open service after a near-monopoly by other airlines that started in 1977.

From Bloomberg News
09:38 AM PDT, March 31, 2008

Delta Air Lines, Continental Airlines and Northwest Airlines began flights into London Heathrow airport today as a new treaty expands transatlantic air travel.

The European Union-U.S. accord ends a lock on flights between the U.S. and Heathrow for British Airways, Virgin Atlantic Airways, United Air Lines and American Airlines under a 1977 agreement. The airport is Europe's busiest, and attractive to other carriers as the continent's key hub for premium travel.

"The main battleground is the corporate traveler using the business-class cabin," said Chris Tarry, an independent airline analyst in London. "U.S. airlines which are new entrants to Heathrow can now offer their corporate clients a greater range of opportunities to London and via Heathrow."

Delta, Continental and Northwest are the third-, fourth- and fifth-largest U.S. airlines, respectively, and their Heathrow arrivals will be joined by a flight from US Airways Group, the No. 7 carrier. Starting Monday, Air France-KLM Group will fly from Britain to Los Angeles.

The influx of flights means seating capacity between Heathrow and the U.S. for the summer season is up 21% from a year earlier, according to Aviation Economics, a London- based consulting company. Total capacity is up 3.1%.

Opportunities to fly from Heathrow are limited by a flight schedule that is already at 99 percent of capacity, forcing carriers to pay top dollar for operating rights. Continental paid $209 million for four pair of takeoff and landing slots at the airport.

"Continental and others are paying a gazillion dollars for slots at Heathrow," said James Higgins, an analyst with Soleil Securities Corp. in Solebury, Pa.

Open Skies also gives European Union carriers the right to fly to the U.S. from any of the bloc's countries instead of just from their home nations. Air France will take advantage of that by operating nonstop from Heathrow to Los Angeles, while British Airways plans to start a subsidiary carrier -- called OpenSkies -- that will fly between Paris and New York from June.

The start of the new Heathrow services came as British Airways canceled 37 of its flights from the airport's new Terminal 5 amid disruption to its baggage-handling operations.

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