The UKOffice of Fair Trading (OFT) has broadly accepted the European Commission's conditions for approval of the BA-American transatlantic alliance but has criticised the ban on slot sales and the demand that the US-UK market be opened to all European Economic Area carriers.
The OFT's director general, John Bridgeman, has told the UK's Secretary of State for Trade and Industry Peter Mandelson, charged with approving the alliance, that 'it would be reasonable to allow the [BA-American] alliance to recoup the value [of the slots] on disposal.The sale of slots would itself provide a natural and pro-competitive method for allocating slots.'
Although EC Competition Commissioner Karel Van Miert has responded that the sale of the 267 weekly slots would contravene EC Competition rules, the OFT believes the UK government can overrule him.
Bridgeman also notes that slot reallocations could take longer than the Commission expects and rejects the Commission's demand to open the UK's transatlantic market to EEA carriers, saying this is unlikely to 'remedy the adverse effects of the alliance'.
A spokesman for the UK's Department of Trade and Industry refused to confirm that Mandelson, who will make conditions of approval public on 4 September, favours the OFT's position.
Chris Allen, British Airways' head of competition and industry affairs, says opening the UK's transatlantic market to other European carriers 'doesn't make sense'. European majors would be the main beneficiaries and they already benefit from UKmarket access through strategic alliances with the major US carriers, he says.
Source: Airline Business
