Delays raise election question for BA tie-up

Click to follow
The Independent Online
British Airways is unlikely to get approval for its transatlantic alliance with American Airlines before the general election, posing fresh potential problems for the deal.

This emerged yesterday as London and Brussels remained at loggerheads over who had ultimate responsibility for sanctioning the tie-up, with the European Transport Commissioner, Neil Kinnock, coming down firmly in support of his colleague Karel van Miert, Competition Commissioner.

BA and American maintain that the alliance could get off the ground by the spring. However, industry sources said the investigation into the deal by the US Justice Department and the US Department of Transportation would take several months to complete.

This means that ultimate sanctioning of the alliance and the completion of an open skies agreement across the Atlantic could be left to a Labour government.

Labour is also dubious about whether approval of the deal should ultimately be the responsibility of the European Commission rather than the British competition authorities. But it has also been guarded over whether the conditions imposed by the President of the Board of Trade, Ian Lang, are sufficient.

US airline sources remain confident that American regulatory authorities will demand much more stringent curbs than those proposed by Mr Lang.

In particular, the Justice Department and Transportation Department could refuse BA and American take-off and landing slots at US airports with a shortage of capacity or require that certain routes are exempted from the alliance.