March 12, 2015

SAS hit jackpot twice with Heathrow’s ‘slot machine’

It has been announced that Scandinavian Airlines (SAS) will be selling two of its slot pairs at Heathrow by the end of October, reducing their holding to just 19 daily slot pairs. SAS have made it clear that after this sale of both slot pairs, they do not intend to further reduce their slot numbers at Heathrow any further. Nor is it a case that they intend to reduce services to London. The intention is instead to fly to other London Airports, while increasing the size of its planes that fly to Heathrow. Despite this reduction in slots, SAS still remains the fifth largest carrier at Heathrow by weekly flights. At present SAS fly from Heathrow to Copenhagen, Gothenburg, Oslo, Stockholm and Stavanger.
It was in February that SAS announced they had agreed to sell one of their slot pairs to a ‘major international carrier’, which has been revealed to be Turkish Airlines. Based on SAS first quarter results, the pair of slots, a morning one, raised US$82m and will take effect from the 29th March. However with the news that it is Turkish Airlines who have bought the pair of slots, it has also been revealed that they have also acquired a second pair, which they will take over on the 25th October, at the beginning of the winter season. However this second pair of slots is in the afternoon, and the figure agreed for it was US$22m, a considerably lower figure than that paid for the morning pair. Slots do not often change hands and are usually acquired along with an airline takeover. Their value seems to have skyrocketed from a value some ten years ago of around US$6m, and in 2007 and 2008 two slots sold put a then staggering value of US$30m on a pair. More realistically, 2013 saw a pair sold for US$22.5m, so these figures paid by Turkish airlines would seem to indicate that values, certainly for morning pairs, have leapt once again.



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