BA chief demands end of subsidies

SIR COLIN MARSHALL, chief executive of British Airways, yesterday called for an end to subsidies of European airlines and attacked US bankruptcy rules that protect ailing companies from creditors while allowing them to operate, writes Mary Fagan.

Sir Colin said that the biggest constraint on civil aviation development was politics rather than economics or technology. He urged the Government to act on subsidies during its presidency of the European Community and criticised the European Commission for allowing aid to airlines including Iberia, Sabena and Air France. Sir Colin said that Chapter 11 bankruptcy protection in the US had become a significant factor, with 25 per cent of US airline operations protected in this way.

He rejected fierce criticism from rival airlines in the US which have opposed BA's planned dollars 750m alliance with USAir, America's fourth-largest carrier.

United Airlines, Delta and American Airlines have said the link would give BA de facto control of USAir.

A report last night that BA is in advanced negotiations to buy an important stake in the French regional airline, TAT, to exploit the single European air market coming into effect next year, was dismissed as 'purely speculative' by a BA spokesman.