BA puts money for USAir on ice: Analysts claim move is aimed at labour negotiations at the American carrier

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The Independent Online
BRITISH AIRWAYS confirmed that it was suspending further investment in USAir until its transatlantic partner improves its financial performance. New York analysts claimed yesterday that the move was an attempt to influence labour negotiations at USAir.

USAir, in which BA bought a 24.6 per cent stake last year for dollars 400m, yesterday said it expected to make a first-quarter loss of dollars 200m because of competition from lower- cost airlines in eastern US cities.

BA intended a further dollars 450m investment to bring its USAir stake to more than 44 per cent if US restrictions on foreign ownership of airlines were relaxed. USAir is planning a cost-cutting programme and BA said it would not invest more money until the outcome of the restructuring was known. USAir met union leaders in Pittsburgh yesterday for talks over labour costs and contracts. Analysts said BA was aiming to strengthen USAir's hand.

Meanwhile, BA yesterday tried to rise above the tide of fresh dirty tricks allegations by maintaining that its behaviour towards other airlines had been 'entirely proper'.

Harry Goodman, former chairman of International Leisure Group and Air Europe, has issued a writ claiming damages from BA over the collapse of his business empire three years ago. And allegations that BA waged dirty tricks campaigns against other carriers, including Air France and American Airlines, will emerge in a book being published later this month.

Yesterday Robert Ayling, BA's managing director, firmly dismissed allegations that it had unfairly poached passengers from other airlines. 'Nothing which is happening or has happened at Heathrow is anything but entirely proper,' he said. 'Where airlines' services are disrupted, we will take the opportunity, if customers wish it, to transfer those passengers to BA services if that is convenient to the customer.'

Mr Ayling said he had not seen the book, but added: 'From what we know and what we hear, there doesn't appear to be anything new in what he is putting forward.'

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