BA wants American deal approved before year end

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The Independent Online

British Airways warned yesterday that unless its transatlantic merger with American Airlines was approved by the end of the year it could take another five years to reach an agreement.

Giving evidence before the US Senate, BA executives argued that time was running out for such a deal to be brokered.

With Brussels expected to wrest authority from member states for negotiating air service agreements at the end of the year, BA said this was the last chance for the long-running proposed merger to take place.

"We feel very strongly there is a window of opportunity to get an open skies deal between the UK and the US," said Roger Maynard, BA's director of investments and alliances.

The company yesterday took its case to the Senate's Sub-Committee on Anti-trust, Business Rights and Competition which is hearing evidence on international airline alliances.

The company claims that since the two airlines originally proposed the merger in 1996, the US has allowed a number of its European competitors to operate alliances with American carriers. In all, the US has reached so-called 'Open Skies' arrangements with 17 European nations.

But despite lengthy negotiations, a deal to liberalise air services to Britain has remained elusive, largely because BA has refused to give up the number of landing slots at Heathrow that regulators have demanded in order to allow more US airlines to enter the market.

BA – which this week posted second-quarterly losses of £72m – was yesterday supported by the British Government which presented written evidence to the committee, setting out its position. "The UK Government remains firmly committed to liberalising air services between the UK and the US, and believes that the prospects for achieving liberalisation before the end of 2001 are now better than they have ever been," its testimony read.

"The UK Government believes that these alliances, and a new liberalised air services agreement, are if anything more important and urgent, not less so, as a result of the events of 11 September."