Brussels backs US call for more Heathrow slots

The European Commission has raised the stakes in its investigation into the planned alliance between British Airways and American Airlines, by adopting the findings of a US congressional report which suggested rival American carriers should gain substantially increased access to Heathrow Airport.

Karel van Miert, the EC competition commissioner, has suggested new conditions for approving the alliance which are understood to be close to those outlined by the US General Accounting Office (GAO) in a report published earlier this month. The GAO stopped short of outright opposition to the tie-up, concluding rival US carriers should receive an extra 320 lucrative take- off and landing slots at Heathrow, equivalent to 23 daily round trip flights.

The GAO's figure was almost double the 168 slots which the UK Office of Fair Trading provisionally said BA and American should give up over a two year period if the agreement went through. The OFT has still to reveal its final verdict on the alliance after intense opposition to its preliminary findings from other US airlines.

Mr Van Miert's revised approach could form the basis of an agreement with the UK government, which since the election has softened its opposition to the Brussels involvement in scrutinising the alliance. The OFT and EU had been working in parallel and had hoped to reach an agreed position on the number of slots the two airlines would have to give up.

Rival US carriers, which are mostly excluded from Heathrow, have mounted an unprecedented public campaign against the BA-American link-up, arguing it would give the two airlines control over more than 60 per cent of UK- US flights. Under the alliance they would pool ticket revenues, marketing and sales operations at Heathrow and coordinate flight timetables.

The Commission has already been forced to postpone its decision until August because of a continuing internal disagreement over whether BA should receive financial compensation for any slots taken away. The GAO report fudged the crucial question of how many of the 320 slots the alliance partners would have to sacrifice and whether BA and American could sell them.

Sources said Mr Van Miert was still implacably opposed to plans by Neil Kinnock, EC transport commissioner, to legalise the unofficial "grey market" in slots. Bob Ayling, BA chief executive, has insisted the airline could not give away slots without compensation.

After months of debate the two commissioners have now accepted they cannot reach a compromise on slot trading and are likely to put the competing arguments to a full Commission hearing in July. Mr Van Miert has argued it would be wrong to legitimise the market in slots because they were originally given to the carriers for free.

His hardline stance has been strongly supported by other US airlines who have argued the GAO's proposals represent an "absolute minimum" for approving the link-up. "The US report is a first step but it doesn't address the issues of how slots are traded and how they are created on key routes," said one rival American carrier yesterday.

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