Open Skies. The words themselves give the feeling of limitless opportunity. But despite the literary potential, transatlantic flights are up only 3.6% for the summer of 2008 – the first summer of Open Skies between the US and the EU. When examining individual markets, it is clear that there are winners and losers. And with limited fleet growth – especially by financially-burdened U.S. carriers – the full potential of Open Skies is not likely to be reached in the near future. The winners – in that they will be handling more US-EU flight capacity than last summer – are Dublin, London/Heathrow, Seattle and Rome. The losers – in that they will be handing less US-EU flight capacity than last summer – are Glasgow, Las Vegas, London/Gatwick and Milan. Clearly the changes in London and Ireland are a direct result of US-EU Open Skies. Bermuda II is gone. The required Shannon stop is gone. How could Heathrow and Dublin not benefit as a result? Changes in other routes, however, cannot be fully attributed to Open Skies, especially since the US and major EU countries enjoyed Open Skies and all its benefits prior to this historic summer. The reallocation of equipment by carriers to beef up their LHR services certainly caused reductions in other markets. The financial health of other carriers – such as Alitalia – and other technical problems such as those faced by flyglobespan are other reasons for shifts in capacity. Following is a summary of the biggest winners and losers. The Winners Dublin Dublin's flight capacity is up by 16 percent and now welcomes passengers from three new U.S. gateways – Orlando, San Francisco and Washington, DC. A new codeshare agreement announced between Aer Lingus and United that takes effect in November is also likely to boost Dublin's traffic. London/Heathrow With the Bermuda II restrictions lifted, London/Heathrow is suddenly the most popular airport in the world. US-LHR flight capacity will increase by a staggering 24%. Continental, Delta and Northwest finally begin service from their major hubs… giving Houston, Minneapolis, Raleigh/Durham and Atlanta their first-ever nonstop services to LHR. Rome Rome’s gain is Milan's loss: new (or renewed) service on Alitalia to Los Angeles and Miami. And increased service to Boston, Chicago and New York/JFK. Viva Roma! Seattle Seattle-EU flights will increase over 55% with new service by Lufthansa to Frankfurt and Northwest to LHR. British Airways will also increase frequency to LHR from seven to 13 times per week. Seattle’s transatlantic potential has long been ignored… Air France started this new wave of interest with its nonstop service to Paris last summer. And the competition heats up this summer. Other Winners U.S.-Barcelona flights are up by 50% year over year – from four daily flights to six daily flights – with additions by American from JFK and a doubling of capacity by Continental from Newark. Cleveland’s transatlantic flight capacity will double with the addition of Continental’s new service to Paris, joining CO’s daily CLE-LGW flight. San Juan's service to Madrid on Iberia increases from two to four times per week. ¡Olé! The Losers Glasgow Last summer Glasgow benefited from the new service by flyglobespan; this summer Glaswegians will suffer as a result of flyglobespan’s ongoing problems. US-Glasgow flights are down by 43% year-over-year; not only will Glasgow will lose two US gateways (Boston and Las Vegas) but capacity to its three other gateways – New York, Orlando and Philadelphia – is all down. Las Vegas Las Vegas will experience a 38% decrease in flights to the EU in the summer of 2008. Three European gateways – Dusseldorf, Glasgow and London/STN – will be lost. In addition, Condor’s flight capacity to Frankfurt is down. The capacity declines are a result of an airline bankruptcy (MAXjet), the acquisition of MyTravel by Thomas Cook and the cancellation of service by LTU. London/Gatwick US-LGW flights will decrease by 37% this summer. American Airlines will end all scheduled service to Gatwick, leaving the only U.S. carriers to operate at LGW as Continental, Delta, Northwest and US Airways. And, against incredible odds, all service from Gatwick to US cities with two names will end: Dallas/Ft. Worth, Minneapolis/St. Paul and Raleigh/Durham. Milan/Malpensa Alitalia has suspended all of its US-Milan service as part of the ongoing efforts to prepare the carrier for sale. Flights between the US and Milan are down 33% year over year, with the only new addition as American Airlines nonstop from JFK. Other Losers Hamburg's transatlantic capacity was cut from two daily flights to one with the cancellation of Emirates’ Hamburg-JFK service. Daily flights between the U.S. and Lisbon are down by 35% year-over-year. Shannon will lose its service to Chicago on both American and Aer Lingus; capacity to Philadelphia will also be decreased. Boston is losing service to five European gateways – Stockholm (Finnair), Glasgow (flyglobespan), Manchester (American), Milan (Alitalia) and Knock (flyglobespan). Detroit’s transatlantic capacity is down by 13% - the result of the cancellation of Northwest’s short-lived Brussels service, the British Airways pullout and reduction in flights by Lufthansa. Other Changes New Gateways Salt Lake City will receive its first-ever nonstop service to Europe when Delta inaugurates service to Paris. Lyon and Malaga are new European gateways – with daily and four times weekly service to New York/JFK on Delta, respectively. Old Gateways Two cities lost their only transatlantic connections including Liverpool (flyglobespan to JFK) and Knock (again, flyglobespan to both BOS and JFK). (The cancellation of Air Greenland’s twice-weekly Kangerlussaq-Baltimore service doesn’t fit this category. Although Greenland is a self-governing Danish province, it is not part of the European Union.) Routes by carriers that are not flag carriers of either country served The only route that fits into this category is the new Los Angeles – London service by Air France. We aren’t seeing any routings such as Warsaw-Miami on TAP or Helsinki-Charlotte on CSA. Only time will tell where such undiscovered nuggets of transatlantic potential may be hidden. Cancelled Routes Several longtime routes have been cancelled. Icelandair’s Baltimore-Keflavik service was cancelled after nearly 20 years of operation and British Airways’ Detroit-London/Heathrow service after more than 50 years. Another cancellation of note is Air France’s daytime New York – Paris experiment. A nice French burgundy must go better with dinner than with lunch. And passengers will no longer be able to enjoy US-EU service on Pakistan Air Lines. With the dollar continuing its decline against the Euro and British Pound, the summer of 2008 is likely to be a good one for Europeans who want to visit the U.S. Therefore, the expectation is that EU-flag carriers may more immediately benefit from the Open Skies agreement. Don’t worry, we’ll keep you posted. Source: OAG Schedule Tapes via OAGback. Note: Includes only scheduled flights filed with OAG; Transatlantic refers to nonstop flights between the U.S. and EU member countries only; July 2007 and July 2008 schedules used. © Prepared by Aviation Capital Associates.
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