30/07/10, 05:47:05 EDT

  e-mail this article

Silverjet seeks ticket to Heathrow

telegraph.co.uk

Silverjet, the business-only airline, is in talks about breaking into the lucrative Heathrow to New York market through a link with a major European carrier.

The single-class airline, which currently operates two aircraft from Luton airport, is understood to have consulted advisers about selling itself to operators such as Air France or Lufthansa in order to facilitate a move to Heathrow and the chance to grab a slice of Britain's most profitable aviation route.

"Their plan seems to be to enter into some kind of agreement, either sale or joint venture, with an airline that has landing slots at Heathrow in order to operate business class only flights from the airport," one aviation source said.

The possibility of increased competition from single-class airlines will be a major concern to Heath-row's dominant carriers, British Airways and Virgin Atlantic, as they make the bulk of their profits from premium-class transatlantic seats.

Although it would be more expensive for Silverjet to operate from Heathrow, it is likely that it could still significantly undercut both Virgin and British Airways. Silverjet's base price of around £1,000 for a round trip is roughly half the equivalent fare on an established carrier.

However, to break into the market the airline would need access to highly prized takeoff and landing slots, which both Lufthansa and Air France have.

A source close to Lufthansa said: "A link-up with Silverjet or a similar airline is something I cannot rule out. The airline will look at this, but then they look at many things."

The heat is being turned up on the transatlantic market in anticipation of the introduction the EU/US "open skies" agreement in March next year. The liberalisation of the transatlantic market will allow any European or US airline to operate services between the two continents, significantly increasing competition.

British Airways and Virgin Atlantic have already announced that they are considering services from cities such as Frankfurt and Paris to the US in a direct challenge to the national carriers, Lufthansa and Air France.

With landing slots much more difficult to obtain at Heathrow, a number of airlines are understood to be in negotiations to trade slots in order to break into the airport.

Aviation sources suggest that Air France is in talks to lease up to four pairs of daily slots to Delta, its Skyteam alliance partner, so that the US airline can move its flights from Gatwick to Heathrow. Northwest Airlines is also understood to be in negotiations with the Skyteam alliance to join the group and seek a similar deal.

"Air France has quite a lot of slots going to Paris which do not generate a lot of money," said a source. "What they are likely to do is lease the slots to Delta and then operate a code-share arrangement so they can tap into the new business. By leasing the slots Air France would also maintain control over its long-term strategy."

• VIRGIN Atlantic has started a tit-for-tat price war with BA on transatlantic flights. The two operators have cut prices by up to 10 per cent over the past two weeks .

 Printable Version  | published Sep 09, 2007