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
Voices
Barn owls are among species that could be affected
charity appeal
News
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Sport
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas