BA may give way to secure US deal
Sunday 05 January 1997
United Airlines indicated this weekend that it would drop its opposition to the deal providing the OFT tightened the conditions it imposed on it last month in lieu of a reference to the Monopolies and Mergers Commission.
The draft conditions envisaged that BA would, in effect, give up slots equivalent to 12 round trips a day out of Heathrow. United will argue to the OFT this week that this number should be increased to 15 and that the slots should be given up on specific Transatlantic routes.
United believes that the six routes where BA and American services currently overlap should be targeted for slot concessions. The slots liberated would then be handed to rival carriers to maintain effective competition on the routes.
One of the main concerns about the BA/American deal has been that the alliance would be so dominant on the routes from Heathrow to New York, Boston, Chicago, Miami, Dallas and Los Angeles that competition would be stifled. United will tell the OFT that by taking routes from the alliance and giving them to other carriers, competition will be preserved.
However, United will also argue that BA and American should receive no financial compensation for the slots. It believes that there is an established precedent for incumbent carriers to simply surrender slots. BA has always argued that it should be paid for any slots it concedes.
The OFT will also come under pressure from United to extend the conditions imposed on the deal to cover facilities at Heathrow as well as slots. Ultimately United wants to have its services housed in the same terminal as its partnership airlines, which include Lufthansa, SAS and British Midland. It also wants to be granted fair access to the provision of customer services such as departure and arrivals lounges.
Virgin Atlantic is also concerned that the OFT's conditions were too narrowly drawn. It is expected to continue pressing for the BA/American deal to be referred to the MMC. Virgin has identified a number of important areas where the alliance has anti-competitive implications, which it says were not addressed by the OFT in its draft conditions.
Virgin is concerned that after the early stages of its deliberations the OFT did not consult widely enough and has overlooked crucial issues. It will point to travel agent discounts and corporate travel arrangements as areas that require a full-scale investigation, and will also argue that the conditions on slot concessions are inadequate.
- 1 Reyhaneh Jabbari: Iran due to execute woman for murder of her alleged attempted rapist
- 2 Expert urges cat lovers to own just one animal each
- 3 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 4 The Simpsons death: Creator Al Jean would 'kill himself' before character like Homer or Lisa
- 5 British man raped while urinating in bushes at Oktoberfest beer festival in Germany
Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
Isis an hour away from Baghdad - with no sign of Iraq army being able to make a successful counter-attack
The Aral Sea: Nasa pictures show how what was once the fourth largest lake in the world has become almost completely dry
British man raped while urinating in bushes at Oktoberfest beer festival in Germany
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
'Women, walk wherever you want' posters taken down in Stamford Hill following 'unacceptable' signs separating men and women
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Should gay sex be illegal? 16% of Britons think so
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...