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Delta Air Lines Inc, Continental Airlines Inc and Northwest Airlines Corp began flights into London Heathrow airport yesterday as a new "Open Skies" treaty expands trans-Atlantic air travel. The European Union-United States accord ends a lock on flights between the US and Heathrow for British Airways Plc, Virgin Atlantic Airways Ltd, United Air Lines Inc 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. "US airlines which are new entrants to Heathrow can now offer their corporate clients a greater range of opportunities." Delta, Continental and Northwest are ranked number three, four and five respectively in US airlines. Seventh-largest carrier US Airways Group Inc will also fly to Heathrow. From today, Air France-KLM Group will fly from Britain to Los Angeles. The influx of flights means seating capacity between Heathrow and the US for the summer season is up 21 percent from a year earlier, according to Aviation Economics, a London-based consulting company. Total capacity is up 3.1 percent. "The fuel cost increase will overwhelm the benefits of more competition," Patrick Murphy, a Washington consultant and former deputy assistant transportation secretary, told Bloomberg News. "If anyone's looking for a price reduction overnight, that's not going to happen." US airlines have lifted fares or surcharges 10 times since January 1 as jet-fuel prices rose 80 percent in the past year. EU carriers, including British Airways and Aer Lingus Group Plc, have also increased fees this year. Partnership Delta's first flight into Heathrow landed at 9am yesterday. Another flight from Atlanta, where Delta is based, was scheduled to arrive at noon. The service is part of a revenue-sharing partnership with Air France-KLM, Europe's biggest airline, announced in October. "Being able to add Heathrow to our portfolio was absolutely key for our corporate customers," said Armin Venencie, Delta's regional manager for Europe, Africa and the Middle East. Opportunities to fly from Heathrow are limited by a flight schedule that's already at 99 percent of capacity, forcing carriers to pay top dollar for operating rights. Continental paid US$209 million for four pairs 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. (Shanghai Daily March 31, 2008) |
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