Byers frees BA for takeover of CityFlyer

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The Independent Online
STEPHEN BYERS, the Secretary of State for Trade and Industry, yesterday overruled the Competition Commission for the second time in as many weeks by allowing British Airways' pounds 75m takeover of the Gatwick- based CityFlyer Express to go ahead with less stringent conditions.

The Competition Commission ruled that the takeover would operate against the public interest and would harm competition. To overcome this it recommended an overall cap on the number of take-off and landing slots that BA and CityFlyer could have at Gatwick.

But Mr Byers rejected this in favour of a cap on the slots the two carriers can hold at Gatwick in any one hour. Mr Byers' ruling was backed by the Director General of Fair Trading, John Bridgeman.

A fortnight ago, Mr Byers rejected a recommendation from the Commission that Britain's Milk Marque monopoly be broken up into a series of local suppliers.

The Commission recommended capping BA and CityFlyers' overall share of slots at Gatwick at 41 per cent and restricting it to 70 per cent of slots in any one hour. Mr Bridgeman recommended a 65 per cent limit in any given hour.

CityFlyer is BA's first franchise partner and began operating routes from Gatwick using the BA name six years ago. It flies 12 routes to UK and European destinations, making it the airport's second biggest operator after BA.

BA welcomed clearance for the deal and said it would now hold discussions with the OFT to agree an hourly cap on its slots at Gatwick. The cap will take effect this winter and run until 2004.

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