BA chief urges EU to stop Belgium rescuing stricken airline Sabena

The chief executive of British Airways has written to Mario Monti, the European Union competition minister, saying that Sabena, the stricken Belgian state-owned airline, should be allowed to collapse rather than receiving official aid from the government.

In his letter, Rod Eddington states: "We are concerned that any special Belgian government aid to Sabena might amount to state aid, breaking the spirit of the commission's rulings."

He adds: "As airline consolidation makes progress outside the EU, we also note that the state support for Sabena would prevent the emergence of market-based solutions for airline consolidation in the EU, thus preserving fragmentation and frustrating EU airline ambitions to be global leaders."

Sabena is 51 per cent owned by the Belgian government but is close to bankruptcy. It is in dispute with its unions and Swissair, which control the other 49 per cent.

Sabena and the Belgian government say Swissair had offered to increase its shareholding and underwrite the airline's losses this year. However Swissair would prefer to walk away.

BA is keen on a merger with the Dutch airline KLM. However the deal would face EU competition problems. Other options attractive to BA would be a deal with Aer Lingus of Ireland, or Iberia, the Spanish airline in which BA already owns a 9 per cent stake.

BA is wary of other mega-deals in the airline industry around the world and concerned that without similar mergers it could be left behind.