Small fry launches big duel for the skies hy head hy

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The Independent Online
British Airways' announcement that it will launch a low-cost carrier was hailed by some as `welcome competition'. For other smaller, `no-frills' airlines it is the start of a war, says Randeep Ramesh, Transport Correspondent.

For many airlines, BA's move has an uncomfortable ring about it. They believe that the world's most profitable airline is prepared to throw money at an enterprise in order to snatch market share from its low- cost rivals.

Stelios Haji-Ioannou, the Greek businessman who brought no-frills flying to Britain with easyJet, it is a clear case of BA pinching his idea.

"BA wanted to buy 49 per cent of easyJet. BA said they could not proceed with the purchase because of management were unsure of getting regulatory approval. The next thing I hear is that they have photocopied our idea," said Mr Haji-Ioannou.

Many point out that BA has a track record in "playing hardball". Sir Freddie Laker, the low-fare pioneer, started his Skytrain services to the US in the 1970s but it collapsed after cut-throat competition from the big carriers.

Years later he won a pounds 6m settlement from BA and other airlines after his claims that big carriers caused the failure of his service in 1982.

When Richard Branson started Virgin Atlantic, it was targeted in a "dirty- tricks" campaign by BA. The affair ended with it paying Mr Branson libel damages in an out-of-court settlement.

For easyJet - the original low-cost carrier - nothing less than a full investigation by the European Commission competition authorities will suffice.

"We have a dominant airline willing to lose unlimited sums of money competing with substantially smaller airlines that could be driven out in the process," read newspaper adverts in yesterday's papers. The headline over the full page ad is entitled "Beauty and the Beast" and is illustrated with mugshots of BA's chief executive, Bob Ayling, and the manager of the new airline - codenamed Blue Sky - Barbara Cassani.

And the advert's wording pulls no punches. "It seems to us like a textbook case of abuse of dominant position under article 86 of the EC Treaty. We expect the EC to investigate this new cheap trick by BA and stop it ... Look at their track record: Laker, British Caledonian, Danair, Virgin, who is next? They were all either bought or nearly or actually driven out of business."

BA were not impressed. "There's plenty of room for all of us," said a spokesman.

Many of Mr Haji-Ioannou's peers say this is typically explosive behaviour from the Greek businessman. Frank Pullman, who runs Luton airport - where easyJet flies from, says the local authorities - the owners of the airport - were threatened with legal action by Mr Haji-Ioannou when the airport's owners would not let him "buy" it.

"I think Stelios' first three calls are to his lawyers, his lawyers and his lawyers," said Mr Pullman.

the prices Ba must match

London Stansted to Cork pounds 38 return with Ryanair

London Stansted to Oslo pounds 99 return with Ryanair

London Luton to Munich pounds 98 return with Debonair

London Luton to Barcelona pounds 78 return with Easyjet

London Luton to Geneva pounds 98 return with Easyjet

London to Paris pounds 69 return with Eurostar

(All tickets carry restrictions)