Airlines demand action to check BA dominance

Click to follow
The Independent Online
VIRGIN ATLANTIC and British Midland are planning to lobby the Government for a change in the way take-off and landing rights are allocated at British airports, after BA's purchase of Dan-Air on Friday. They accuse the Government of having no aviation policy and of allowing BA to build up an unfair competitive advantage at Gatwick and Heathrow.

The airlines will make submissions to the Office of Fair Trading on Tuesday, arguing that the deal gives BA an overwhelming number of 'slots'. They will argue that BA's dominance is making a nonsense of the Government's multi-airline policy in the UK.

The OFT is expected to approve the deal, which saves the jobs of 400 Dan-Air staff while 2,000 others will be made redundant. However, British Midland hopes the OFT will exact conditions. 'It could force BA to give up some of its Heathrow slots to compensate for the Gatwick slots it is gaining from Dan-Air,' said Sir Michael Bishop, chairman of British Midland.

But BA's chairman, Lord King, said last week that the airline would pull out of the deal if it was required to make concessions on routes and slots. The Dan-Air takeover will leave BA with about 40 per cent of the slots at Gatwick to add to its 40 per cent share of Heathrow slots.

Virgin is demanding a wider-ranging review of the slot allocation. 'BA's dominance at the two airports is the issue now,' said Will Whitehorn, a Virgin spokesman. 'We want something more than a Monopolies Commission referral. At the moment there are no regulatory powers in the UK to look at the slots system.'

Under current rules, airlines can inherit take-off and landing slots from other airlines they buy. This has enabled BA to accumulate huge numbers of slots.

Virgin and British Midland claim the Government should enforce the principle enunciated by Malcolm Rifkind, the previous Transport Secretary, that landing slots were a permission and not a right. Airlines should not therefore be allowed to buy them, they argue.

The airlines claim the Dan-Air slots should have been divided between the British airlines. This would have been fairer and would also have created more jobs.

The part-privatisation of Aer Lingus, the Irish state-owned airline, is now being publicly advocated by the Prime Minister, Albert Reynolds, as the remedy for a cash crisis in the company.

But the 49 per cent sale plan he proposed last week is unlikely to have many takers. In an industry where just four out of 200 commercial airlines made a profit in the first half of this year, likely European suitors are nowhere to be found.

(Photograph omitted)