BA back on offensive over state aid: 'Cynical snub to the competitive philosophy of the single European market'

BRITISH AIRWAYS yesterday renewed its attack on billions of pounds of 'blatant' state subsidies for other European airlines which it claims will stifle competition and prolong inefficiencies.

Sir Colin Marshall, chairman, said that the willingness of some governments to provide aid, and the expectations of airlines to receive it, were cynical snubs to the competitive philosophy of the single European market.

Speaking at BA's annual meeting in London, Sir Colin singled out French government plans to inject pounds 2.3bn into Air France.

He also criticised proposed aid of pounds 1.5bn for Olympic Airways, the state-owned Greek carrier, and plans to grant Air Portugal pounds 690m. BA would continue to fight until all state aid for the airline industry was exposed and eradicated.

Two weeks ago BA complained to the European Commission over the proposed aid for Air France. It said its French rival should solve its financial problems by selling its stakes in other airlines.

Sir Colin said that attempts to liberalise air services between Britain and the US remained frustrated. He blamed the reluctance of US airlines to allow direct access to their domestic market and said the way forward was a merger of Europe and North America into a free trade area for air transport. He hoped talks between the British and US governments would resume this autumn.

BA would benefit by pounds 70m this year from its pounds 275m investment in USAir through code-sharing and co-operation on frequent flyer schemes. But he acknowledged shareholders' concern over losses at the American airline and reiterated earlier statements that BA would invest no more until it was sure of its long-term viability.

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