Kevin O'Toole/LONDON
NEWS OF THE British Air-ways and American Airlines code-sharing deal and the promise of a US/UK open-skies agreement has sparked off a round of intense lobbying from competitors on both sides of the Atlantic, hoping to make gains from a new bilateral.
BA and American acknowledge that an open-skies deal, including more access to London Heathrow, will have to be put in place before their code-sharing can begin in April 1997. American chairman Bob Crandall says that the partners would like Government approvals by November.
The UK and US departments of transport have remained tight-lipped on the likely scope of talks, but appear to be gearing up to resume bilateral negotiations. The US has made clear that open skies would be a prerequisite for granting the anti-trust immunity being sought under the deal.
Initial condemnation of the deal from within the US airline industry has quickly been followed by demands over the price that the US Government should extract for allowing the alliance to go ahead.
Trans World Airlines pre-empted the announcement on 12 June with a request to the US Department of Transport (DoT) to fly to Heathrow and others now excluded from the hub, such as Continental and Delta, are expected to follow suit.
Two main demands have emerged. The first is to ensure that lack of slots and terminal space, at heavily congested Heathrow and in key US gateways such as Chicago or New York's JFK International, do not effectively block competition. BA and American have firmly rejected any moves to give up Heathrow slots as the price for anti-trust immunity.
"We made a very substantial investment to buy those slots. We are not prepared to give them up," says Crandall. He argues that the partners will hold only 40% of slots at the London airport, compared with 60% for United and Lufthansa at Frankfurt.
A second line of attack has centred on BA's existing code-share alliances with USAir and more recently, AmericaWest, as well as American's ties with British Midland, LOT and others. Although BA says that these will "-remain in place", questions have already been raised by Continental and United over whether these should be curtailed. Crandall says that the new alliance, with 36,000 potential city pairings, compares with 55,000 for United/Lufthansa/ SAS and is similar to the others. The extent of access to around 24 US gateways remains at issue, however.
Bilateral talks will also have to address US demands for fifth-freedom beyond rights from London. Crandall admits that, under present US policy, these would have to be agreed in exchange for anti-trust immunity.
In Europe, the prospect of a US/UK deal leaves France, Italy and Spain as the only large air markets without a US open-skies deal. France is expected to raise the issue when it meets for talks with the USA in July.
Hopes are also growing within the European Commission that it will soon be granted a mandate by the European Union transport ministers to open direct talks with the US DoT over air bilaterals.
Although news of the deal has been roundly condemned in the UK by BA's long-standing rival, Virgin Atlantic's Richard Branson, elsewhere in Europe, Lufthansa and Swissair have reacted with announcements that they are stepping up their own transatlantic code-sharing.
Source: Flight International
