BA tells government US 'open skies' compromise plan won't take off

British Airways urged the Secretary of State for Transport, Alistair Darling, to block any open skies deal with the US which prevented the full foreign ownership of American airlines.

The uncompromising stance from BA yesterday makes it likely that this week's talks in Washington between the EU and US over a deal to liberalise transatlantic air travel and open up Heathrow to all US carriers will end in failure.

Ten days ago, the Bush administration came up with a proposal which would allow foreign carriers greater involvement in the running of US airlines. But it stopped short of scrapping the restrictions which prevent non-US citizens owning more than 25 per cent of the voting rights and 49 per cent of the economic rights of a US airline.

Willie Walsh, the chief executive of British Airways, described the US proposals as a "disappointment" and said Mr Darling and his fellow EU transport ministers should not agree to any deal which gave disproportionate rights to US carriers.

Access to Heathrow is the key to the talks. But BA and Virgin Atlantic say this should be granted only if the US allows 51 per cent ownership of its carriers and abandons the "Fly America" policy which closes one-fifth of the US airline market to non-US carriers by requiring all US government personnel and contractors to use US-owned carriers. The likelihood is the talks will be stalled until spring, when the consultation period on the proposals put forward by the US negotiators 10 days ago is complete.

Andrew Cahn, BA's director of government affairs, described the deal on offer from the US as a "pig in a poke", which the EU negotiators should not accept. He said: "We want access to the US market and a road map to global liberalisation of air travel. At the moment we don't seem to have either. Access to Heathrow is the key prize. The UK has played it effectively for the past 20 years and it is now up to the EU to do likewise."

The UK is supported in its opposition to the US proposals by Germany. The EU's Council of Ministers is unlikely to accept any deal opposed by two of the Union's biggest members.