Franchise plan to tighten BA's grip: CAA attacks Government over failure to refer takeover of Dan-Air

BRITISH AIRWAYS will today announce plans to tighten still further its stranglehold over the UK airline industry by franchising out the BA name to other carriers.

The move is certain to heighten concern over BA's market domination and comes just a day after the Civil Aviation Authority criticised the Government for not referring BA's takeover of Dan-Air to the Monopolies and Mergers Commission.

Last night Sir Michael Bishop, chairman of British Midland, called for a wide-ranging review into the 'monopoly domination' exercised by BA and Europe's other flag-carriers.

Under the BA franchising initiative, other airlines will be allowed to paint their aircraft in BA colours, redesignate their services with a BA coding, and feature on BA's computer reservation system.

The first airline to take out a franchise from BA will be the Gatwick-based CityFlyer Express, although other carriers being lined up are understood to include the Danish airline Maersk, which operates services from Birmingham, TAT, the French carrier in which BA has a 49 per cent stake, and the Plymouth-based Brymon Aviation, now a BA subsidiary.

According to some estimates, the initiative could increase BA's share of UK scheduled services to more than 70 per cent, further consolidating its monopoly in the wake of last autumn's Dan-Air acquisition.

Christopher Chataway, chairman of the CAA, attacked the decision of the President of the Board of Trade, Michael Heseltine, not to refer the Dan-Air takeover. Speaking at the publication of the CAA's annual report he said: 'There is a real danger that allowing that merger to go through without an MMC inquiry will reduce Britain's ability to argue against anti-competitive mergers in future.'

Mr Chataway said there could be takeovers involving other European Community airlines that warranted close scrutiny. But the Government's decision to wave the Dan-Air takeover through would not make it easier for Britain to argue for a strong competition policy within the EC.

Joining the fray in a speech to businessmen in Jersey last night, Sir Michael said the time had come to look at reorganising Europe's dominant national carriers to create companies with better cost bases and lower fares.

'National airlines formerly or currently owned by European governments have retained too much power and are not regulated effectively,' he said. 'It is time to re-examine completely the influence that they wield in their dominant market positions - and to look at how the efforts that go into protecting and exploiting their de facto monopolies can be redirected towards giving the consumer a better deal.'