Europe to rule on cheap flights

THE EUROPEAN Commission is to be asked to investigate claims that British Airways is abusing its dominant market position through Go, its low-cost subsidiary.

Luton-based easyJet will allege the latest fare cut on the London-to- Edinburgh route is an example of predatory pricing. The airline is worried its legal action against BA may not be heard until next spring.

The move comes against a background of speculation that easyJet's chairman, Stelios Haji-Ioannoou, may be considering selling the airline he set up. It has made losses of about pounds 9.5m over the past two years.

A spokesman for easyJet, James Rothnie, said: "We will approach the Commission's competition unit, where we already have links. We'll suggest it may be worth pursuing a case of predatory pricing which is an abuse of dominant market position, particularly on the Edinburgh route."

He said Go, as a subsidiary of BA, was operating at below the cost of production. He believes BA is using its resources to destroy competition.

A BA spokesman said the company did not wish to go into specific issues until it had the details of easyJet's submission. "We have constantly maintained there is nothing unlawful or anti-competitive about Go's operation. In fact we are convinced it will widen the choice available to passengers."

If the Commission's competition directorate, headed by Karl van Miert, decided there could be a breach, it would write to the company asking it to respond. If the situation could not be resolved it would be sent to the Court of Justice, which could impose a fine.

Go launched a no-frills service to six destinations in May and last week cut fares by as much as 50 per cent.