Ba, American Alliance Review Goes To British Govt

"I can confirm that the papers left for the Department of Trade today," an OFT spokeswoman told Reuters.

Normally a detailed review by the OFT, which should include recommendations, forms the basis of a decision by Trade Secretary Ian Lang on whether to refer such matters to the Monopolies and Mergers Commission for a full monopolies probe.

Industry sources, who had correctly predicted that the OFT would complete its three-month study this week, say they do not expect Lang's verdict before next week.

Recent media and industry speculation has suggested that Lang will give the alliance qualified clearance, provided that BA's home hub, London's Heathrow airport, is opened up to competition.

 

In seeking compromise, such action would address some of the fierce criticism which the plan has drawn from rival airlines, as well as consumer groups and travel agents, who say the mighty alliance would dominate the transAtlantic market into London.

Under the link-up, BA intends to coordinate its 244 weekly flights from Britain to 22 US destinations with American's 238 flights from seven US airports to 12 European destinations.

They would also combine their frequent flyer programmes and share flight booking codes to promote their connecting flights on computer reservation systems, and combine cargo businesses.

BA and American, part of AMR Corp, argue that their deal will lead to greater competition on British trans-Atlantic routes because it will only go ahead if Britain and the United States liberalise the market with an "open skies" trade pact.