Why Delta Air Lines needs the Virgin Atlantic partnership and slots at Heathrow

December 10, 2012
December 10, 2012

from Skift.com

Delta Air Lines and its Skyteam partners are slot paupers at London Heathrow, and that’s an overriding reason why Delta is thought to be in the advanced stages of talks to buy Singapore Airlines’ 49% stake in Virgin Atlantic Airways.

Skift analyzed the 2012-2013 winter allocations at Heathrow by airline alliance using data fromAirport Coordination Ltd., a UK-based, airline-owned company responsible for coordinating slots at Heathrow and 29 other airports in Europe, North America, and the Middle East.

The allocations in the charts below are the weekly slot designations for airlines and alliances at Heathrow for winter 2012-2013, and the numbers show that Delta, the largest U.S.-based carrier, has a measly 28 slots at the airport, a vital gateway to the rest of Europe, Asia and the Middle East.

Those 28 slots for Delta amount to a minuscule .30% (i.e. less than 1%) of the 9,296 slots at the airport, while British Airways, which rules the roost at Heathrow, commands 4,902 (52.7%).

Alliances don’t share and share alike

British Airways’ dominance of Heathrow is great news for Oneworld partner and Delta competitor American Airlines, which has 200 (2.2%) Heathrow slots for the upcoming winter.

With 210 slots at Heathrow, United Airlines has a few more slots than American, but United doesn’t have a Star Alliance partner that can rival British Airways’ hold at Heathrow — actually, no one does.

However, United’s Star Alliance partner Lufthansa has 520 allocations (5.6%) at Heathrow, and that’s the second-highest slot number of any airline at the airport.

Delta has Virgin slot lust

Virgin Atlantic doesn’t belong to any of the big three airline alliances, and the airline commands a coveted 304 slots (3.3%) at Heathrow, and Delta lusts for access to them.

There is speculation that Delta’s Skyteam partner, Air France-KLM, would jump into any Virgin ownership restructuring because Delta, as a U.S. carrier, is barred from taking a majority equity position in Virgin. Delta and and Air France-KLM already conduct some joint operations at Heathrow.

However, Air France-KLM indicates it is not currently involved in the discussions with Virgin, and Virgin boss Richard Branson says he has no intention of giving up control of his baby.

And, for now, at least, reports indicated that Delta and Virgin are discussing a transatlantic joint venture, which would have a combined 332 slots at Heathrow.

If Air France-KLM eventually joins in with Virgin and Delta, then together they would command 686 slots at Heathrow, which is a greater presence than Skyteam’s entire current allotment of 601 slots at the airport.

Even if you add Virgin’s 304 allocations to Skyteam, for argument’s sake, bringing the total to 905 slots, the alliance would still be a distant third to Star Alliance’s 1,638 slots, let alone Oneworld’s 5,596.

However, with Delta’s paltry 28 slots at Heathrow, or 446 per week if you count joint operations with Air France and KLM, it’s clear that the Atlanta-based carrier has to do something dramatic to improve its access to more lucrative long-haul routes from Heathrow.

The slot numbers show it.

Heathrow Winter 2012/2013 Allocation of Air Transport Movements

Airline Allocations Percent
Virgin Atlantic 304 3.30%
Delta 28 0.30%
Air France 154 1.70%
KLM 200 2.20%
Total 686
Skyteam
Aeromexico 6 0.10%
Air France 154 1.70%
Alitalia 119 1.30%
China Eastern 8 0.10%
Delta 28 0.30%
Kenya Airways 14 0.20%
KLM 200 2.20%
Korean Air 16 0.20%
Middle East Airlines 14 0.20%
Saudi 28 0.30%
Tarom 14 0.20%
Skyteam Total 601
Star Alliance
Aegean 34 0.40%
Air Canada 126 1.40%
Air China 14 0.20%
Air New Zealand 28 0.30%
All Nippon Airways 14 0.20%
Asiana 14 0.20%
Austrian Airlines 56 0.60%
Brussels Airlines 28 0.30%
Croatia Airlines 18 0.20%
Egyptair 30 0.30%
Ethiopian Airlines 12 0.10%
LOT Polish Airlines 40 0.40%
Lufthansa 520 5.60%
Singapore Airlines 58 0.60%
South African Airways 42 0.50%
Swiss Airlnes 182 2%
TAM Brazilia“ 20 0.20%
TAP Air Portugal 90 1%
Thai International 28 0.30%
Turkish Airlines 60 0.60%
United 210 2.30%
US Airways 14 0.20%
Star Alliance Total 1638
Oneworld
American Airlines 200 2.20%
British Airways 4902 52.70%
Cathay Pacific 62 0.70%
Finnair 56 0.60%
Iberia 154 1.70%
Japan Airlines 14 0.20%
Qantas 56 0.60%
Royal Jordanian 16 0.20%
* Malaysia Airlines 28 0.30%
* Sri Lankan Airlines 24 0.30%
* Qatar Airways 70 0.80%
* Kingfisher 14 0.20%
Oneworld Total 5596
Heathrow Total 9296

* Invited to join Oneworld

Source: Airport Coordination Limited, September 6, 2012

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