BA may give way to secure US deal

British Airways is negotiating with the Office of Fair Trading over new conditions for clearance of its proposed alliance with American Airlines. If BA is prepared to make further concessions on take-off and landing slots at Heathrow, it could head off opposition to the deal from US carriers and pave the way for the alliance to be sealed in the next few months.

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.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
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

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before