BA claims tie-up will benefit rivals by $1bn

Bob Ayling, chief executive of British Airways, yesterday stepped up his defence of the group's planned alliance with American Airlines, claiming rival carriers would see benefits in revenue growth worth $1bn (pounds 613m) as a result.

At a speech to mark the tenth anniversary of BA's flotation, Mr Ayling claimed services between Heathrow and the USA would grow by a fifth if the alliance partners had to give up some of their lucrative runway slots at the airport under proposals from the Office of Fair Trading.

The OFT says the tie-up could escape a referral to the Monopolies and Mergers Commission if the partners had to divest 168 slots, equivalent to 12 daily round-trip flights.

Mr Ayling said the new services would come when the UK and US concluded an "open skies" agreement to liberalise access to Heathrow Airport. Rounding on critics of the strategy, which has linked approval for the alliance to the successful outcome of the talks, he said: "It may not please our competitors, nor the purists among the competition authorities, but in the real world it offers the only chance of real progress."

The alliance involves BA and American going beyond simple "code-sharing" arrangements to a deal where the two airlines pool revenues and facilities. Rival carriers in the US have launched an unprecedented attack on the link-up, which would give BA and American 60 per cent of UK-US flight capacity.

Mr Ayling's remarks were seen by other airlines last night as an attempt to back up his insistence that British Airways should give up Heathrow slots only if it gets financial compensation. Experts have estimated that the proposed168 slots, which amount to almost all the slots currently allocated to American Airlines, could net BA pounds 180m.

The debate over slot trading has become crucial to the successful conclusion of the alliance after European Commissioners said the practice of selling the slots was illegal under Commission rules.

But rival carriers doubted BA's claim that services would grow by 20 per cent from the slot divestiture plans. A spokesman for United Airlines said: "We frankly doubt whether BA and American are doing this in order to cut their own share of the market. From their point of view that doesn't make sense."

Other US airlines have pointed out that BA and American would still be left with more than 3,000 slots at Heathrow. They have also claimed that other facilities, including security checks, baggage handling and departure gates, are in such short supply that the open skies deal would in practice lead to little growth in flight capacity.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

BA/PM,EMIR/Dodd-Frank,London,£450-650P/D

£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...

Senior Analyst - ALM Data - Banking - Halifax

£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...

Java developer - Banking - London - Up to £600/day

£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...

Liquidity Reporting-Basel III-LCR-Bank-£400/day

£400 per day + competitive: Orgtel: Liquidity Reporting - Basel III - LCR - Ba...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz