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28/01/2002
Transatlantic airline alliance described as “unrealistic”
Plans for an alliance between British Airways and American Airlines have seemingly fallen through after some aspects of the plan fell foul of strict regulatory terms imposed by the US.
The complications arose when the US Department of Transportation agreed to the deal – but only on the condition that both airlines surrendered 224 of their take-off and landing slots at Heathrow Airport to other US airlines.
While the offer was considered by the carriers, both companies pulled out from the agreement, describing the terms as “unrealistic” and “unnecessary”.
The real issue centres on the signing of an “open skies” agreement, which would see the US and the UK committing themselves to a liberalisation of the air travel between the two countries. Talks on the issue were due to resume on Monday, but have since been postponed.
Speaking about the outcome, Sir Richard Branson said that the failure to secure such an agreement lay with both the Conservatives and Labour for allowing all recent proposals to be “based on the narrow, anti-competitive interests of one British company.”
However, the current reluctance of BA to enter into an alliance with American Airlines has been dismissed by some as nothing more that “posturing” designed to secure the deal on the company’s own terms.
Some business analysts think the sides may go back to the negotiating table and attempt to hammer out a more favourable deal. (CL)
The complications arose when the US Department of Transportation agreed to the deal – but only on the condition that both airlines surrendered 224 of their take-off and landing slots at Heathrow Airport to other US airlines.
While the offer was considered by the carriers, both companies pulled out from the agreement, describing the terms as “unrealistic” and “unnecessary”.
The real issue centres on the signing of an “open skies” agreement, which would see the US and the UK committing themselves to a liberalisation of the air travel between the two countries. Talks on the issue were due to resume on Monday, but have since been postponed.
Speaking about the outcome, Sir Richard Branson said that the failure to secure such an agreement lay with both the Conservatives and Labour for allowing all recent proposals to be “based on the narrow, anti-competitive interests of one British company.”
However, the current reluctance of BA to enter into an alliance with American Airlines has been dismissed by some as nothing more that “posturing” designed to secure the deal on the company’s own terms.
Some business analysts think the sides may go back to the negotiating table and attempt to hammer out a more favourable deal. (CL)
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