Etihad is shrinking while JetBlue is growing. That presents a strategic business opportunity at London Heathrow.
Jet Airways is on the verge of collapse, but leaves behind some incredible assets…including three that may be particularly valuable to JetBlue. I’m talking about London Heathrow slots.
Last week, Indian regulators revoked Jet’s license to transport passengers on international routes. As Jet fights for survival, its three rented Heathrow slots have been returned to Etihad.
Jet owned these slots but sold them to Etihad for $70 million in 2017 in order to raise cash. Etihad promptly leased them back to Jet. Now Etihad is suddenly flush with three unexpected slots.
Etihad’s Difficult Decision
With Jet Airways on the verge of collapse and unlikely to ever recover, Etihad has a strategic choice to make. It can sit on the slots, rent them, or sell them.
With 3-4 flights per today between London and Abu Dhabi and fierce competition from Emirates, Qatar, and other carriers for connecting itineraries, Etihad simply doesn’t need to add more capacity on the route. In fact, doing so would likely be counterproductive.
Thus, the real choice is between selling or renting them.
Slots are both date and time restricted, which determines their value. While Etihad paid $70 million for JET’s three slots, Delta paid less than $20 million for a trio of Heathrow slots from Croatia Airlines that departed at less popular times and were limited to weekdays.
Currently, Jet’s schedule from London includes a mix of morning, afternoon, and evening slots.
- 9W119 London LHR 10:05 AM – 12:30 AM+1 Mumbai BOM 77W
- 9W115 London LHR 03:30 PM – 05:55 AM+1 Mumbai BOM 77W
- 9W121 London LHR 08:10 PM – 11:25 AM+1 Delhi DEL 77W
- 9W117 London LHR 09:05 PM – 11:25 AM+1 Mumbai BOM 77W
Potential JetBlue Schedules
Let’s say JetBlue took these slots. Would it work for flights to Boston or New York?
Certainly, a departure around 10:05 AM and 03:30 PM would be ideal to either JFK or BOS. But what about the late evening departures? Few carriers often late-night transatlantic departures from London Heathrow, but this presents an opportunity for JetBlue.
Imagine departing London at 8PM after a day of meetings and a business dinner. You sleep for 6-7 hours and arrive into New York around midnight. You’re already somewhat rested, but you go home and sleep even more.
JetBlue already offers westbound late-night transcontinental flights like this…you can read my review of a late-evening departure from JFK to LAX in MINT class herehere. Although a late arrival into New York or Boston would limit (or likely curtail) same-day connecting traffic, it would theoretically be a hit due to the relative scarcity of flights departing Heathrow at that late hour.
CONCLUSION
It’s not like JetBlue is the only carrier who could use these three Heathrow slots. But this unexpected development from Jet Airways appears to be a golden opportunity to score slots at London’s busiest airport.
You forgot to put a hyperlink in “you can read my review of a late-evening departure from JFK to LAX in MINT class here”. 🙂
Not sure what you mean by ‘few carriers offer the evening departures’ and then reference an 8pm LHR departure. BA and VS both offer departures to BOS and JFK within 15 minutes of 8pm.
The other major issue you run into is aircraft utilization. An 8pm departure may sound nice, but it would mean the aircraft would either arrive on a daytime flight that departs before 7am(BOS) or 6am (JFK), which isn’t ideal, or having it sit around all day from the evening before and waste a frame when they’ll only have 13 LRs to begin with.
I can see B6 offering a daytime East and late evening West flight as the slots are likely cheaper, but an 8pm LHR departure wouldn’t be a real differentiator.
I like the innovation in the trans-Atlantic flight market. American offers a daytime flight to London that takes off in the morning and lands in the evening, perfect for people who cannot sleep on planes. I often book evening flights following meetings and this would be a nice option for me.
The other thing that makes sense is that JetBlue needs them, Eithad needs the cash and can’t use them anyway so why not?
Won’t be of much value to JetBlue due to the “use it or lose it” rule at LHR. They would simply lose the slots before launching their flights in 2021.