Government joins fight over Air France

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The Independent Online
THE GOVERNMENT has thrown its weight behind British Airways and other airlines in challenging the European Commission's approval for a Fr20bn ( pounds 2.4bn) package of state aid for the state-owned Air France.

In an unprecedented move, the Department of Transport is applying to the European Court of Justice to annul the decision, taken in July.

Dr Brian Mawhinney, Secretary of State for Transport, said: 'This decision cannot be left to stand unchallenged. Allowing such a large amount of subsidy to one of the three largest airlines in Europe will distort competition. It will also jeopardise the benefits of the single market in air transport, which we have worked so hard to create.'

He said the Commission had ignored the need for even-handed treatment and removed the incentive for state-owned airlines to become efficient and adopt a commercial approach to business.

Sir Colin Marshall, BA's chairman, said yesterday that the decision to approve the aid was 'deplorable and unjustified'. BA will challenge the approval in conjunction with KLM of the Netherlands and several other European airlines.

The airlines say the amount of aid is excessive and the conditions attached to it inadequate. A spokesman for BA said the aid was roughly equivalent to BA's entire profits over the past decade or to the total losses made by international airlines in 1993.

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