Lang to approve BA link ahead of open skies talks

Ian Lang, President of the Board of Trade, is expected to give the go-ahead to the British Airways-American Airlines alliance in the middle of next month to coincide with the resumption of talks between the UK and US on an open skies agreement across the Atlantic.

Industry sources indicated last night that Mr Lang, who received the Office of Fair Trading's report on the tie-up three weeks ago, will announce his decision in about a fortnight.

Meanwhile it emerged that talks between UK and US negotiators on the liberalisation of transatlantic air services will restart in Washington on 6 November and run for three days.

Depending on what progress is made in these government-to-government talks, there will be a second round of negotiations in London beginning on 18 November at which airline representatives from the two countries will also be present.

This would indicate that the UK Government aims to give its approval to the alliance in the middle of November to enable government negotiators and airlines from the two countries to sit down and hammer out an open skies deal.

The open skies agreement will give all US carriers access to Heathrow. But the signing of the agreement is contingent upon the alliance between BA and American being approved.

Mr Lang had been expected to make his decision known by the end of this month but an announcement has been held up by the need to co-ordinate any statement with progress in the bilateral talks.

The BA-American alliance has been fiercely opposed by consumer rival airlines including Virgin Atlantic, United Airlines and Delta because of the stranglehold it would give the two carriers over transatlantic services.

Together BA and American would control 60 per cent of flights between London and the US but in some cases, such as services between Heathrow and Boston, Miami and Seattle, they would control 100 per cent of the market.

BA has maintained that the parallel open skies agreement would mean more competition and lower prices.

Meanwhile American Airlines played down reports that it was poised to sign a deal worth $10bn with Boeing for up to 100 new aircraft.

Reports suggested that the airline was preparing to order 60 of Boeing's latest long-range twin-jet, the 777, and a further 40 smaller 757 aircraft.