Denver is the largest American market without nonstop airline service to the United Kingdom. So the city's aviation department has spent tens of thousands of dollars in recent years trying to land a British Airways flight to London. Today city officials, who sold DIA to voters as a prairie mecca for transoceanic travel, are continuing to glad-hand the British giant--despite a proposed new business partnership that would seem to undercut the already dim prospects for Denver service by the U.K. carrier.
The business partnership in question is a proposed "alliance" between British Airways and American Airlines, already the two leading carriers in the U.S.-Europe market. The airlines are seeking antitrust immunity so they can not only engage in code-sharing--linking reservation systems in order to funnel passengers back and forth--but also share revenue from overseas flights. And because the alliance can't take place unless British authorities approve a long-sought "open skies" agreement with the U.S., it could have far-reaching implications for Denver.
The good news for Denver is that an open-skies deal would theoretically pave the way for Denver's hub carrier, United Airlines, to begin nonstop service to London's Heathrow airport, the world's busiest international airport and the hub of United's European operations. United, which dominates the Denver market, currently has authority to fly to London's secondary Gatwick airport, a route that was dropped by Continental Airlines when that airline slashed Denver flights in the wake of DIA's opening. United has declined to pick up where Continental left off, citing its inability to funnel passengers to connecting planes at Gatwick.
The airline has expressed some interest in a Denver-Heathrow connection. "They have publicly said that should they have Heathrow access, they would serve Denver to London," says deputy aviation director Diane Koller of United. But the airline isn't offering any ironclad guarantees. Roger Gibson, United's vice president for the Rocky Mountain region, says through a spokeswoman that any discussion of future flights is speculative, and that while United "would love to be flying Denver-Heathrow," a Chicago-London flight would be the airline's first priority under an open-skies agreement. Denver, he adds, would "definitely be second."
Industry observers say United's historic reluctance with regard to nonstop London service is explained by the fact that it can already send Denver-U.K. passengers through its Chicago gateway and would realize no real benefit by switching from one-stop to nonstop service. Either way, the airline's refusal has been a sore spot with Denver officials, who plied local voters during the campaign to build DIA with promises of plentiful overseas flights.
That may be one reason Koller and other Denver officials are lining up behind the American-British Air alliance, which United and other airlines have attacked as anti-competitive. United already has a code-sharing arrangement with Germany's Lufthansa; similar agreements also exist between Northwest Airlines and the Dutch carrier KLM, and between Delta Airlines and a consortium of Belgian, Austrian and Swiss carriers. But because American and BA already dominate the U.S.-Europe market, their proposed partnership would have a much larger impact on international service.
On August 1 Mayor Wellington Webb sent a letter supporting the open-skies agreement to his predecessor, U.S. Transportation Secretary Federico Pena. Though Webb didn't mention the American-British Air pact by name, the two issues are so closely linked that the letter is viewed as a tacit endorsement of the airline partnership.
But there's a downside to Denver in an American-British Air alliance: American's relatively modest presence at DIA. The airline flies just nineteen flights per day from Denver to only two nonstop destinations, and thus has no pool of connecting passengers to offer BA. That would seem to give British Air little incentive to take on the costs and operating inefficiencies associated with flying heavy jumbo jets into a high-altitude landing strip--especially when it would have United's octopus-like Denver hub to contend with once it arrived.
But despite its low profile in Denver, American is talking up the BA alliance with Denver authorities, claiming it will make it easier for people to travel between Colorado and Europe. "By combining the sales and marketing forces of American and British on both continents, you're going to increase the opportunity for more service," says Chris Chiames, managing director of public relations for the Fort Worth-based carrier.
And it isn't hard to see why city officials have signed on to the plan, even though an increasing number of American flights are bypassing DIA altogether and flying directly to Colorado ski areas. DIA executives have long been embarrassed by Denver's failure to attract a U.K. flight and have rarely met a promotional opportunity they don't like. One current effort will resume this week, when Peter Spencer, director of U.S. operations for British Airways, will fly to Denver to speak with Webb and chamber of commerce officials.
Webb began the dialogue with Spencer when he jetted to London last year to hobnob with British authorities. And the mayor isn't the only one on the Denver payroll who's been courting British Air. Denver also employs a $60,000-per-year employee at DIA whose sole job is to lure international service, and the city has budgeted $100,000 this year for a consulting firm to perform similar public-relations work. That firm, Massachusetts-based Simat, Helliesen & Eichner (SH&E), last year prepared a $10,000 promotional pamphlet pleading with British Airways to fly to Denver ("Flights of Fancy," April 18).
So far, however, British Airways has shown about as much interest in flying nonstop from Denver as has United. The reason is simple economics, says Golden aviation consultant and longtime DIA critic Mike Boyd. "Airlines go where there's traffic," says Boyd. And he says the only airline that can even hope to generate enough traffic to London is United, which operates more than 200 flights a day from Denver and funnels thousands of regional connecting passengers through DIA each day.
"What these second-rate marketing people at DIA would have you believe is that they're making great progress [with British Airways]," says Boyd. "What they leave out is that British Airways had authority to serve London out of here and they moved it to Tampa." The English carrier also would not have recently inaugurated a nonstop Phoenix-London hop if it were interested in using Denver as a regional gateway, Boyd adds.
Boyd also is skeptical about the alleged benefits to consumers from code-sharing or revenue-sharing alliances. "In the best case, they bring marginal benefits to the carrier and marginal benefits in some cases to the consumer," he says. "Beyond that, it isn't that big a deal. When the dust settles, it really translates into KLM buys the napkins for Northwest and Northwest buys the beer for KLM."
DIA officials, however, remain eternally optimistic about their chances for landing overseas flights--even though they're still not sure whether the airport's much-vaunted sixth runway, which allegedly would give wide-body jets the distance they need to lift off with heavy loads at this altitude, will even be built. To Koller, for instance, the fact that BA transferred its Denver route authority to Tampa isn't a bad sign--just a reminder that the route is flexible and thus could be transferred back if the airline so desired.
And when it comes to overseas flights, optimism has long been the byword in Denver. In a "forecast summary" completed by SH&E in 1987 and enthusiastically embraced by airport officials, the firm predicted that by 1993 Denver would boast 57 regularly scheduled nonstop flights per week to destinations outside North America, ranging from London and Paris to Switzerland and the Bahamas. Today, despite the city's cheerleading efforts, the number of such flights is slightly lower. It's zero.