Threat to limit US carriers' flights: Deadline set in diplomatic row over BA link with USAir

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BRITAIN will tomorrow repeat its warning to the Clinton administration that flights by US carriers into Heathrow will be curtailed unless British Airways is allowed to expand its alliance with USAir.

The warning will be delivered when British and US negotiators resume talks in London on an open skies policy across the Atlantic.

The talks, scheduled to last three days, are likely to be dominated by the diplomatic row that has blown up over the link-up between BA and USAir. Last month the US Transportation Secretary, Federico Pena, unexpectedly announced curbs on the two carriers' rights to code-share - the arrangement that allows BA to operate services beyond its gateway hubs in the US to USAir's vast domestic network of destinations.

Britain responded by warning that it would reduce the number of Heathrow flights that United Airlines and American Airlines operate from Washington and Chicago.

Officially, the British side continues to argue that the BA-USAir dispute and the wider liberalisation talks are unconnected. However, the US negotiators insist they are inter-related and are certain to raise the issue when the talks resume.

The sanctions against United and American are due to take effect from 12 January, the day BA's code- sharing rights with USAir expire. The dispute could quickly escalate into a damaging air war with tit-for- tat reprisals on both sides.

US sources said they did not believe it would come to that - provided the UK side made concessions. The US wants greater access to Heathrow for its carriers. The UK has agreed to this but only when the restrictive ownership rules governing US airlines are amended.

Mr Pena and John MacGregor, Secretary of State for Transport, have set a deadline of next March for agreement on liberalising transatlantic air services. However, it is clear that the US expects to have obtained concessions from the UK before that.