Wednesday, February 10, 2010


There has been a lot of ‘toing and froing’ over the sale of BWIA’s Heathrow slots with critics saying that the slots were seriously undersold and BWIA management saying that the slots were sold at a fair price. The lead proponent of the ‘fair price’ argument is former BWIA Board member William Lucie Smith.

For those who came in late, a ‘slot’ can be defined as a particular landing and departure right at a particular time on a particular day at a particular airport. Put another way, one slot (or pair) can be defined as the right to land and depart at certain times on a particular day. BWIA had seven such slots at Heathrow Airport … one of the busiest airports in the world. Indeed, Heathrow has more flights that wish to land and take off than it can handle. In other words there is a scarcity of slots. To make it worse, prices are controlled so that raising the costs simply to use the airport won’t work … it’s not allowed. The fact that there is an excess demand for slots makes these a valuable asset for any airline that has one or more of them, especially if these slots are at prime times. And BWIA had seven such slots at prime take off and landing times!

These slots have not only a high strategic value for airlines but a high cash sale value as well. Early morning landing and take off slots are particularly valuable for the long haul flights … and again, that’s what BWIA had. Now, admittedly there is a grey area when it comes to determining the value of a slot. But take a look at the following tables and you will get some idea of how much a slot is worth:

Table 1 Airlines Shares of Slots Heathrow (Summer 2004 and change from 2001)

Airline and rank

Heathrow Slots – movements per week


Change from 2001 (%)

BA (1)




British Midland (2)




Lufthansa (3)




Aer Lingus (4)




Virgin Atlantic (5)




SAS (6)




AA (7)





9332 (9308 in 2001)


Source: Competition Issues associated with the trading of airport slots. A paper prepared for DG TREN by the UK Office of Fair Trading and the Civil Aviation Authority, TSO, Norwich, 2005, p. 34.

Table 2. Some Transactions and Implicit Values in the Heathrow Slot Market

Purchase and year


Price or Value


Quantas from Flybe (2004)

2 pairs

£20 million (€30 million)

Primetime take off and landing

Virgin Atlantic from Flybe (2004)

4 pairs

£20 million (€30 million)

British Airways from SN Brussels Airlines (2002)

7 pairs

£25-30 million (€37.5-45.0 million)

Only slots acquired by cash appear on balance sheet (my emphasis)

British Airways from Swiss International Airlines (2004)

8 pairs

£22.4 million (€33.6 million)

British Midland asset valuation (2005)

90 pairs

£425 million (€637.5 million)

The Observer claims a series of writedowns mean that bmi is now worth ‘£225m at most’, i.e. less than its slot portfolio.

Sources: Issues of Travel and Hospitality Industry Digest: 23 March, 2007, 11 June 2004, 06 August 2007, 11 June 2007, 31 January 2005. See:

Now, it is generally agreed by all in the airline industry that the slots will only increase in value. Remember that BWIA sold its seven slots for a grand total of Pounds Sterling 5 million, which seems on the face of it and without any really good explanations to date, to be a sale at a serious undervalue. What happened?

Put another way, I certainly cannot say that there is or was “bobol” in the sale and purchase of the BWIA slots. I have absolutely no evidence to make that suggestion. What I can say (and am saying) is that on the face of it and without any proper explanations having been given to date, it is not unreasonable to believe that the sale was at a serious undervalue. The big question is WHY?

If you can really show that it was not at an undervalue, then do so in a clear and cogent manner. Don’t brush us off with platitudes and obfuscations. Failure to do so will result in very nasty and most unfortunate suspicions that cannot be good for the national psyche. I am not the only one who does not understand why this sale was made at this seemingly low price.

[1] This works out at 145 return (‘pair’) services per week, an average of approximately 20 per day.


  1. Thank you Sir.

    Can you also include -
    1. Air Jamaica's Heathrow slots sold to Virgin?
    2. Slots which were not sold for cash only but those sold with strings attached? E.g. the obligation of the purchaser to continue servicing a route regardless of how (un)profitable it may be?

  2. From the Express:

    Myth #3: BWIA had seven Heathrow slots that could have been sold for more. BWIA really had one pair. The decision that London must close meant that the Heathrow slots had to be traded. A slot is simply a time to land or take-off and if not used is lost. Although slots are not an asset that can be sold the British Airports Authority has allowed airlines to swap or trade them.

    A slot is always in pairs because you must land and take-off. BWIA did this every day and had 730 slots annually or seven pairs weekly or one pair daily. Slots are traded as pairs of daily slots, of which BWIA had one not seven. These slots were tendered to both BA and Virgin. Although Virgin offered slightly more money, the BA proposal provided at least three direct flights to Trinidad a week and a code share through Barbados and an option on a slot at Gatwick.

    Allegations that the slots were undersold are just plain ill-informed as the price received was similar to other trades at the time (e.g. SN Brussels) and independent reviews were carried out by experienced UK aviation lawyers. Shortly thereafter Air Jamaica traded their one pair of daily slots for a similar price.



  4. I think we must be more clear.
    We have seen two different ways of referring to a “Slot” (Pair of Slots, arrival and departure)
    Some talk of a “Daily Slot and others talk of “Weekly” Slots.
    Bwee had ONE daily slot or seven Slots weekly.
    I think it would be considered “Primetime” for long-haul flights.

    When Continental Airlines, the American carrier, wanted to start operations from Heathrow (in 2008 I believe) it had to spend more than £100 million on only four slots, and there are rumours that other carriers have paid much more.
    That’s £25 million per (daily) Slot.
    The Times (UK)

    In 2004, Qantas and Virgin Atlantic trumped British Airways by paying record sums for scarce take-off and landing slots at London's congested Heathrow airport.
    The Australian flag carrier, a BA partner, paid £20m - up to twice the normal rate - for two pairs of daily slots, industry sources said. Virgin has paid a similar sum for four pairs.
    In 2003, BA, paid about £12m for a pair of Heathrow slots owned by United Airlines.
    The Guardian (UK)

    So we can see that daily Slots have gone for £5 to £25.
    The valuable Slots would be the Primetime Slots.
    Given the period , 2006, we may have got more but remember, there was more to the deal. It is reported that BWEE got £5 as part of the Deal.


  5. There is no question that BWIA had the right to fly into Heathrow with more than one pair of slots per day. I know of many occasions when two BWIA aircraft flew into or out of Heathrow on the same day.

    "BWIA sold its slots for £5 million in 2006. Continental, in 2007, purchased four (4) slots for US$209 million/£105 million, with each slot being valued for an estimated US$52million/£25 million. Also, Alitalia, in 2007, sold three (3) slot-pairs for an estimated US$133 million".

    When the privileged get into positions as caretakers of what belongs to The People of Trinidad and Tobago, they tend to forget that they are caretakers, and get the mistaken notion that they are the owners to do as they please.

    Those slots belonged to all the People of Trinidad and Tobago, who would not take kindly to the possibility that their patrimony was sold cheap by caretakers looking for something under the table. Was the BWIA mash-up really a cover-up?

    Further, Human and Industrial Relations at BWIA were exemplary until Duprey and Lock Jack got involved. Up to now CLICO has not returned to BWIA workers that part of their Pension Surplus that was meant to buy BWIA shares (shares that the workers never got ... and they still want their money back).

    And, didn’t Lock Jack violate Section 4 of the Constitution, and Section 71 of the IRA when he said that he would not have CAL hiring those who are trade union members (a practice maintained up to today). In the IRA 42. (3) An employer who contravenes subsection (1) or (2) is liable on summary conviction to a fine of ten thousand dollars and to imprisonment for one year...

  6. Which is true?

    In :
    Caribbean Airlines: fact and fiction by William Lucie-Smith
    Wednesday, 06 January 2010 06:46
    We read of :
    “Myth #3: BWIA had seven Heathrow slots that could have been sold for more. BWIA really had one pair. The decision that London must close meant that the Heathrow slots had to be traded. A slot is simply a time to land or take-off and if not used is lost. Although slots are not an asset that can be sold the British Airports Authority has allowed airlines to swap or trade them.”

    « on: December 07, 2006, 03:20:40 AM »
    BWIA’s 7 Heathrow slots sold for £5m.
    By Gail Alexander (Guardian).

    We read of :

    Seven slots used by BWIA at London’s Heathrow Airport were traded to British Airways for £5 million—approximately TT$60 million—in negotiation for the new Caribbean Airlines to use BA for its London route, Minister in the Ministry of Finance Conrad Enill confirmed yesterday.
    Enill was asked about the issue yesterday following a press conference at which Congress of the People’s Ganga Singh claimed the slots had been sold for that sum.
    The slots have been used by BWIA for decades for landing and departure of aircraft at Heathrow Airport.
    Singh questioned whether T&T had received the best “deal” for BWIA’s seven slots in view of higher sums paid by other airlines for such slots.
    Singh called on the Government for full disclosure on the issue and the contractual arrangement with BA. He also called for the value of BWIA’s seven slots.
    Singh noted that BWIA had held the slots since the 1960s and had “grandfather rights” to the areas.
    He said the slots, and these rights, were BWIA assets since Heathrow was the most congested airline hub in the world.
    But he said nothing was mentioned of the slots or their value in the Task Force report on the future of BWIA.
    He noted that Enill in Parliament last week had said T&T had to use the slots or lose them.
    Singh noted a report “Competition Issues Associated with the Trading of Airports Slots” which was done for the UK office of Fair Trading and Civil Aviation Authority.
    That report showed the value of these airline slots at Heathrow Airport.
    Singh said Quantas Airlines of Australia had sold its eight pairs of slots from a regional airline called “Flyme” for £20 million or TT$240 million.
    BA also bought 14 slots at Heathrow from Swissair for 43 million Swiss francs, he said.
    And in 2002, BA bought seven pairs of slots from SN Brussels for £30 million or TT$360 million, Singh added.
    “A year-round pair of slots with early morning arrival was alleged to be worth up to £6 million for some carriers and BWIA has seven pairs of slots which are in prime time since BWIA lands at Heathrow at 8.30 am and leaves at 11.45 am,” he said.
    “BA bought SN Brussels’ slots in 2002, a year after 9/11 and now in 2006, Heathrow is much more congested and there’s greater demand for these slots.
    “So BWIA’s chief executive officer Peter Davies, once the CEO of SN Brussels would certainly have had an appreciation of the value of seven pairs of slots in 2002.
    “We now have new slots at Gatwick Airport in London which are much cheaper...but did we get the best deal for BWIA’s seven Heathrow slots?”
    Singh also queried if other airlines had been allowed to bid for the slots.
    Commenting after, Enill confirmed the slot sale figure of £5 million pounds.
    He said the price was part of the negotiations with BA for the new Caribbean Airlines—which replaces BWIA—to incorporate a BA flight out of T&T for its London route.
    Enill said CA was not intended to be as expansive a carrier as BWIA was.
    “CA will be going into London still, but it will be doing so via BA, since we have been looking for a carrier for the London route,” he said.
    The Heathrow slots did not belong to BWIA as such but were entrusted to the airline which had “grandfather rights,” he said.
    He added that the slots could be sold or transferred to someone else.

  7. It looks like if someone in Jamaica may soon make a jail over the sale of the Air Jamaica slots (a la BWIA). Read the reprot in the Jamaica Gleaner here