Europe supports BA call for Paris airport access: Commission orders France to open up domestic routes

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The Independent Online
THE EUROPEAN Commission yesterday ordered France to open up its domestic air routes following a complaint from TAT, part of British Airways. BA responded by announcing four new daily return flights from Paris Orly to London Heathrow from June, although the French transport ministry said it would contest the ruling.

The commission's decision overturned a French government ruling last year that foreign-owned airlines serving Paris could only use Paris Roissy-Charles de Gaulle airport, and not Paris Orly.

BA has a 49 per cent stake in the French airline TAT, which complained to the commission in September that France was discriminating against it in the French internal market and on Paris-London routes.

Air France had a monopoly on the Orly-Nice, Roissy-Marseilles and Roissy-Toulouse routes through its Air Inter subsidiary, and on the lucrative Orly-Heathrow link.

The commission decided yesterday that France had fallen foul of its 'open skies' airline deregulation policy. As a sign of goodwill the transport commissioner, Abel Matutes, suggested the company be given six months to open the Orly- Toulouse and Orly-Marseille routes but ruled that Orly-London must be opened immediately.

The French transport ministry said: 'The government does not intend to allow a unilateral and legally contestable decision to be imposed and will without delay ask the European Court of Justice to rule on the principle and procedure chosen in this affair.'

The decision gives BA a valuable foothold in the Orly hub that serves the French domestic market.

'Orly opens up a whole new catchment area for both BA and TAT,' a BA spokesman said.

Under EU rules France has a month to appeal to the council of ministers, who are unlikely to overturn the decision given that only the French commissioner opposed it. Jacques Delors, the commission president, abstained.

The ruling bodes ill for a bigger battle that Air France is waging to win EU approval for a Fr20bn ( pounds 2.32bn) capital injection as part of the lossmaking carrier's financial rescue plan.

The commission is split on state aid for industry and, although the competition directorate under the Belgian socialist Karel van Miert is broadly sympathetic, it has applied the rules regarding the award of competition-distorting subsidies.

But a recent report ordered by the commission suggested one-off cash injections should be permissible if they were part of a restructuring.

Private carriers pointed out that Air France had already received Fr8.5bn in subsidies since June 1991.

For the French government the health of Air France is a hot political issue.

Union opposition to an earlier rescue attempt resulted in a government climbdown and the resignation of Bernard Attali as chairman.

His successor, Christian Blanc, has persuaded 40,000 workers to accept a pay freeze, as part of his prescription package, but without the proposed subsidy he will not be able to push through the rest of his intended reforms.

(Photograph omitted)