BA axes regional route

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The Independent Online
British Airways yesterday raised the stakes in the battle to obtain regulatory approval for its American Airlines alliance by suspending its Glasgow-New York service and warning other long-haul routes were at risk if the tie-up was not sanctioned.

Bob Ayling, chief executive, said the route had lost pounds 7m in the past three years and could only be made profitable by the extra feeder traffic the alliance with American would create.

The Glasgow-New York-Boston route is one of three transatlantic services operated by British Airways Regional. The airline said other long-haul regional routes might have to be scrapped if the alliance was blocked because there was insufficient local demand to keep them profitable.

Mr Ayling said: "We have maintained the route while we awaited approval for the alliance but we have now been waiting for over a year and we cannot continue to incur these huge losses."

BA announced the alliance in June 1996 but has since run into lengthy delays winning approval from regulators in Washington, London and Brussels.

The most serious opposition is coming from the EU Competition Commissioner, Karel Van Miert, who earlier this week reiterated that the alliance would not be approved unless the two airlines gave up 350 slots a week at Heathrow - double the level of capacity the Office of Fair Trading wants to see cut to approve the deal.

The outcome of the US Department of Transportation's investigation of the alliance will not be known until December at the earliest.

The announcement of the Glasgow-New York suspension was coupled with a plea from Mr Ayling for regional backing for the alliance to secure the long-haul services BA currently operates.