As theatre goes, it was in a class of its own. And as the curtain went down on a US Senate hearing into the US-UK open skies talks in early June, the prospect of progress seemed as remote as ever.
The general consensus was that Robert Crandall and Robert Ayling, the respective chief executives of American Airlines and British Airways, were left assessing the extent of the damage heaped on their year-old alliance plans - the focal point of the hearing.
The Senate Subcommittee on Aviation faced a formidable line-up of witnesses: Crandall, Ayling, US Airways chief executive Stephen Wolf, Virgin Atlantic Airways chairman Richard Branson, and Laker Airways chairman Sir Freddie Laker. Crandall's testimony centred on the competitive necessity that pushed his carrier into seeking an alliance with BA, pointing to the number of other antitrust immunised alliances that exist and, in particular, United Airlines' new Star Alliance which, he said, dwarfed anything that his airline was proposing.
But Wolf fought hard to keep the senators focused on what he saw as the central issues - the lack of access to Heathrow and the threat to competition that the alliance poses. 'I have no objection to an alliance between BA and AA,' says Wolf, adding that without conditions linking open skies and the alliance the mega-alliance would be a mega-monopoly.
Ayling appeared to fare even worse than Crandall. He seemed thrown by hard questioning on BA's access to Chicago/O'Hare, where, he was forced to admit, his airline had been provided the slots it needed free of charge.
Ayling's testimony that sufficient slots were available to competitors seeking access to Heathrow, either through acquisition or from their own alliance partners, prompted Branson to interrupt. 'It is incredible to see this man look you in the eye and hear him say this. Heathrow is full,' he protested. Wolf added that he had spent a 'significant fraction of a lifetime' trying to open up Heathrow, without success. 'There are woefully insufficient slots,' he said.
'I have heard a lot about what a smart man Ayling is. I was disappointed,' remarked one observer who has witnessed many similar hearings. 'Wolf, by contrast, was economical with his words, but extremely powerful.' Another observer said the message Wolf gave 'was the sort of stuff that resonates' and would send an important message to both the justice and transportation departments.
Outside the hearings, American made much of a General Accounting Office report saying that the provision of at least 23 new daily US-UK roundtrips to other US airlines might form the basis of an agreement that would increase competition. American claims that slots for more than half of those flights could be available through new creation or purchase, rather than through compulsory transfer from BA-AA. But the GAO found that it would take several years for sufficient slots to become available, BA and the European Commission are still disputing whether slots can be bought and sold legally.
Ayling can take some heart from his meeting with competition commissioner Karel van Miert two days prior to the Senate hearing. One source close to BA says the meeting 'went well' and was surprised how much relations had improved. On the down side, van Miert has postponed any ruling on the alliance until the end of August, after officials had made much of the fact that there would be a decision by the end of May.
Source: Airline Business
