MacGregor will urge US to approve BA tie-up

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JOHN MacGREGOR, Secretary of State for Transport, is today expected to urge the United States to approve British Airways' dollars 750m tie-up with USAir when he meets his opposite number in the Bush administration.

The talks take place amid growing opposition to the deal from other US carriers that is almost certain to prevent BA from completing its investment in USAir by their self-imposed deadline of the end of the month.

Mr MacGregor is expected to press Andrew Card, US Transportation Secretary, on the need for liberalisation of transatlantic air travel and the domestic US airline industry. The minister is also due to deliver a speech to airline executives on the same theme.

The three biggest carriers, American, United and Delta, have called for the tie-up to be blocked on the grounds that it would give BA effective control over USAir, in contravention of US law.

BA is proposing to take a 49 per cent equity stake in the loss-making airline in a deal that would give it 21 per cent of USAir's voting rights and four seats on its 16-member board.

Opponents of the agreement claim it would give BA control because all key decisions would require an 80 per cent majority.

United and American want increased opportunities to fly to regional UK airports as the price of US regulatory approval for the BA/USAir tie-up.