BA fears 'open skies' deal

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The Independent Online

British Airways is lobbying frantically to prevent the European Commission agreeing an open skies pact with the US this week, which would open up its Heathrow bastion to competition from rival transatlantic carriers.

As EU negotiators and their American counterparts prepare for a final round of discussions, BA is urging the UK Transport Secretary Alistair Darling to block any deal that might be agreed, even if it is ratified when the Council of Transport Ministers meets on 10 June.

BA executives fear that Brussels is intent on doing a deal at any price simply to put existing open skies agreements between individual member states and the US on a legal footing and will seek to get it ratified at the council.

"We do have a fear that the Commission might be tempted to do a deal and then go to the Council and say this is the best we could do," Andrew Cahn, BA's director of government relations, said.

He says that the latest offer from the US to open up its domestic market to European carriers in return is "risible" and that Brussels is preparing to waste its bargaining chip - which is access to Heathrow. Services from the UK to the US account for 40 per cent of the European market.

If there is a vote at the enlarged council of ministers next week, it will be decided on qualified majority voting. There is a strong possibility that a deal will get through as 17 of the member states have no interest either way in securing better terms from the US. The Bush administration, meanwhile, is said to be putting pressure on France and the Netherlands, both of which already have bilateral open skies deals with the US, to support an EU-wide agreement, with the veiled threat that it will block the Air France-KLM merger otherwise. The current bilateral agreement between the UK and US allows only four carriers - BA, Virgin Atlantic, American Airlines and United Airlines - to operate transatlantic services from Heathrow. Bmi, which has been lobbying for four years to start transatlantic services from Heathrow, claims that access to the US domestic market is a "red herring" because airline alliances already make that possible.