Patience is a virtue that American Airlines and British Airways surely must be learning. Both carriers seem resigned to more months of delay as their proposed alliance faces scrutiny on both sides of the Atlantic.
But BA now hopes that the European Commission might put all alliances at a new starting gate by issuing revised rules under which they can operate in Europe.
BA's chief executive officer Robert Ayling says he is 'extremely encouraged' by recent indications from European Union competition commissioner Karel Van Miert that he will treat all alliance applications in a non-discriminatory way. 'Those [alliances] that are doing business today, coordinating schedules, fixing prices, are doing so without antitrust immunity from Europe and are doing so at their peril,' says Ayling. 'They all have immunity from US antitrust laws. They needed it. They all need, but none has, immunity from antitrust laws of the European Union.'
A Commission source says a revised methodology and approach to alliances is being formulated. 'We want to apply the same rules to all the cases and adopt a uniform approach. To ensure that, we have to devise a new methodology. This is brand new and will provide the basis for all future cases,' he says.
American's managing director of international affairs, David Schwarte, is now looking at summer 1999 as a likely launch time for the alliance, assuming a US-UK open skies agreement is sealed by this September or October. 'We need serious negotiations to begin between the UK and US governments. American is urging them to allow a staged approach. The accord could only be implemented when a specific number of competitive flights come into place,' says Schwarte.
In mid-February there were reports that the Commission is also looking at whether the alliance should give up slots at London/Gatwick as well as Heathrow. 'If Gatwick becomes an issue, then we will look at it. But if the Commission is too tough on slots, we will have to consider whether the deal is worth it,' says BA's head of competition and industry affairs, Chris Allen.
Ayling predicts that an oral hearing will be requested by the US Department of Transportation, again delaying approval. But AA and BA seem reluctant to part with certain documents requested by the DOT. Ayling says they have already supplied 20 boxes of documents, while United supplied just one file when the Star Alliance was examined. 'Any reasonable and lawful request for documents will be satisfied,' says Ayling.
But there is certainly no talk of quitting yet. 'Throwing in the towel is not something that I was taught to do,' says Ayling. 'We have a reasonable and just proposal on the table and our objective is to secure it. But it takes time.'
Karen Walker
Source: Airline Business
