BA code-sharing deal must face European scrutiny

The European Commission yesterday gave warning that it will scrutinise Tuesday's code sharing pact between American Airlines and British Airways as both sides continued to tie up smaller deals around the world.

The deal between the two airlines, ranked among the top three in the world, is set to create one of the strongest combinations in air travel, with control of 60 per cent of all London to New York traffic. The alliance is already facing an anti-trust probe in the US and British Airways chief executive Robert Ayling expressed a hope on Tuesday that that the European Commission would not also need to vet the venture.

But a statement from the Commission yesterday said it would have to vet the latest agreement and any others to ensure they were compatible with EU competition rules. Transport spokeswoman Sarah Lambert said: "We have to see the details and it is obviously going to be a fairly lengthy project."

News of the EU intervention came as BA announced a new franchise deal with the South African regional airline Comair in only the second such deal by the British group outside the UK. Comair will remain a separate independent company, but, in line with other franchisees, its fleet will be painted in the BA livery.

Meanwhile, American Airlines announced that it had reached a code-sharing agreement with Singapore Airlines on the Singapore-Chicago route.

The Commission yesterday pressed again for a global "open skies" agreement between the EU and the US, a move which has so far been opposed by a majority of EU states.