Tainted sale

[Lazie]

Assasin you demonstrate the fact that a little knowledge is a dangerous thing.

Can you tell me the main factors that determine the value of airline slots?

What yuh saying? Him showing "his own misunderstanding of the facts"?

[Assasin]

The first one is the Airport at Heathrow which is the busiest airport in the world and many airlines want slots in Heathrow.

Every analyst who is not a politician I have heard said it was worth more.

[Don1]

Tune in to http://www.telegens.com/nationwideradio.htm they're still reading it.

I really like Emily Crooks very much. She is my favourite media person along with Suzanne Malveaux from CNN. Very easy on the eyes.

However after listening for a few minutes I realize she is nitpicking and also flogging a dead horse with this slot bizniz.... it's boring and nothing will come of it.

Mi gawn.

[Assasin]

How did you come to the conclusion it couldn't sell for more?
I said you were misinformed because the CG report said it was not sold as financial deal and yet you said he didn't say we could get more for it.

[Don1]

The first one is the Airport at Heathrow which is the busiest airport in the world and many airlines want slots in Heathrow.

Every analyst who is not a politician I have heard said it was worth more.

Can you answer my question please, what are the main factors impacting the value of slots... even slots within the same airport?

Do you know?

[Lazie]

I really like Emily Crooks very much. She is my favourite media person along with Suzanne Malveaux from CNN. Very easy on the eyes.

However after listening for a few minutes I realize she is nitpicking and also flogging a dead horse with this slot bizniz.... it's boring and nothing will come of it.

Mi gawn.

... of course it would be boring. Whats that line in A Few Good Men .... "You Can't Handle the Truth!!"

[Don1]

What yuh saying? Him showing "his own misunderstanding of the facts"?

I don't think he dug into the issue deep enough before forming strong opinions ... this causes deficient arguments.

The valuation of airline slots is not straightforward... even slots at the same airport have widely different valuations.

[Assasin]

I just gave it to you.

There are no slots to to be sold at Heathrow. There is a huge demand for slots and not many available. That influence the sale.

Now did we only have to sell it to Virgin or BA?

[Don1]

... of course it would be boring. Whats that line in A Few Good Men .... "You Can't Stand the Truth!!"

The truth? Mi nuh care bout Omar. If im bruk di law dem fi lock im dung.

But believe me... his intervention is embarrassing but nothing will come of it.

Ministers do that every day of the week... and twice in Sundays.

[Assasin]

UK airlines start to value landing slots as assets on balance sheetsPublished: 12/5/08

Contact: Jo Ouvry
Deloitte
Public Relations
+44 (0) 20 7303 4820

Deloitte is expecting that certain UK airlines will start to value all of their landing slots as assets on their balance sheet annual results.
Commenting on the move, Graham Pickett, aviation partner at Deloitte said: “With such high demand for landing slots, many airlines have realised the slots they hold are very valuable. For the most part2, these are not included as assets on an airline’s balance sheet. It is important that this value is fairly recognised so that airlines have the potential to use them as security against borrowings.”
Deloitte has calculated that in Europe the most valuable landing slots are those at London Heathrow, followed by Charles de Gaulle, Gatwick and Frankfurt. Based on a recent transaction the implied value of a pair of peak time slots at London Heathrow is currently worth between £25 and £30 million3. The value of slots varies primarily depending on the time of day they are for.
Whilst EU regulations are in place to ensure landing slots are allocated fairly, they have generally failed to significantly erode the presence of the ‘national flag’ carrier airlines at key airports.
At Heathrow, for example, this summer there are a total of 9,562 slots available. 99% of these are held by legacy/ flag carrier airlines - those already established at the airport. 41% of Heathrow slots are held by British Airways. BMI hold a further 11% and Virgin Atlantic hold 3%. Deloitte’s research shows that just 1.0% of slots are available for allocation to new entrants and many of these are unusable because of their timing or other factors.
With the introduction of the Open Skies Agreement and limited scope to increase capacity at Heathrow and Gatwick airports, in particular, due to air traffic congestion, Deloitte expects the value of landing slots to remain high.
Graham Pickett said: “The Open Skies agreement should lead to greater demand between airlines for landing slots at Heathrow. London Heathrow is seen as the ‘Crown Jewel’ for landing slots. Where previously just four airlines could operate flights from Heathrow to the US, the Open Skies agreement opens the market to new entrants and we expect other airlines to look to acquire slots here.
“However, airlines keen to rival the incumbent players may find it difficult to secure landing slots. Trading in slots, a bit of a grey area in terms of regulation, can be an extremely expensive business. There could, however, be the potential for airlines to use landing slots as security against borrowings if they can now recognise them all on balance sheet at valuation. It will be interesting to see what position airlines finally take and how banks regard such assets over the coming months.”
For further information, read our executive summary and download our report Open skies - Is it time to recognise valuable airport slots on balance sheet?
Ends
Notes to editor

1. A slot is the right to land or take-off from an airport including having access to the airport terminal for the passengers and crew. Often industry commentators refer to pairs of slots. Pairs refer to a take off and a landing at a particular airport at a particular time of day.
2. If an airline purchases a new landing slot from another airline, then it will be capitalised on the balance sheet. However, the value of legacy slots already owned by the airlines has not, until now, been recognised.
3. Value of Heathrow slots – the value of £25-30 million is based on analysis of slot purchases in the last six months, such as Continental Airline who paid US$209m for four pairs of take-off and landing slots to GB Airways, Air France and Alitalia. Further examples of Heathrow slot sales are available in Deloitte’s client report.

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other’s omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press.

Contact us for more information

[Don1]

I just gave it to you.

There are no slots to to be sold at Heathrow. There is a huge demand for slots and not many available. That influence the sale.

Now did we only have to sell it to Virgin or BA?

You did not answer.. clearly because you do not know the factors.
2 more questions:

1. What is an airport slot?

2. Say there are 2 planes at Heathrow.. one is a Cessna Citation and the other is a Boeing 777. Do they have the same value since they are at Heathrow?

[Don1]

The CG report even pointed out that while we sold the slots at that price, other slots were sold for much more. If thats not incompetence then what is? What me waan fi know is how the Virgin owner knew that his bid was more that BA's therefore he insisted that he wouldn't be improving his offer.

What you should ask is if the slots were so valuable... why didn't BA bid more?

All slots are not created equal.

[Assasin]

Read my post below and you will see it say pretty much the same thing I said..

I posted it in at the bottom so you wouldn't miss it.

[Lazie]

What you should ask is if the slots were so valuable... why didn't BA bid more?

All slots are not created equal.

Well, Mr. Spinmaster ... obviously Omar needs to hire you. Although the only one who seem to believe the madness you coming with seems to be you.

[Assasin]

No the ones at Gatwick and Heathrow don't value the same.

Are BA and Virgin the only two Airlines?