Ba Expects Progress On Open Skies

I expect significant progress on an open skies agreement by the end of September, BA chief executive Robert Ayling said.

B A's controversial plans to link with American Airlines have sparked fierce opposition which has overshadowed open skies' negotiations. Critics of the proposed link-up say BA must give up some of its 38 per cent share of slots at London's Heathrow airport to prevent the Anglo/American duo from dominating the transatlantic market.

The U.S. called off the latest round of open skies talks with Britain last week, with the prized issue of Heathrow landing slots cited as one of the major sticking points.

 

The US wants access for all US carriers to Heathrow, Europe's most popular airport. Another major hurdle in the talks are US demands for rights for its carriers to fly from Britain to other countries in Europe.

In return for opening up Heathrow, British carriers, including BA want the US to raise its 25 per cent ceiling on foreign ownership of airlines - thereby allowing British airlines access to the giant US domestic air passenger market.

The US market is saturated. The only way of gaining access is through buying into an existing carrier, Ayling said.

Ayling said there was still a great deal of horse trading to get through before an agreement can be finalised but despite the obstacles he remained confident a breakthough would come sooner or later.

I believe both governments are still anxious to achieve a new bilateral arrangement. I remain confident that with good will and good sense, an agreement can be reached, he said.

Despite the contentious issue of Heathrow, Ayling said he did not believe BA would necessarily be forced to relinquish some of its coveted landing slots.

I do not accept that we will have to give up some of the 38 per cent share, he said.

BA's domestic long-haul rival Virgin Atlantic however, believes an open skies agreement will not be struck unless BA surrenders some of its the prime Heathrow landing rights.

No deal will happen (without BA giving up slots) - the American carriers just won't accept it, said Virgin's chief spokesman Will Whitehorn.

Whitehorn claimed a British Airways/American Airlines link-up with existing slots would give the two carriers a dominant position that could not be broken, regardless of how many carriers entered the market.

On the trans-Atlantic run BA and American control 80 per cent of the peak-time slots between Britain and America, Whitehorn said.

There is no point in competitors coming into the market if they can't get peak-time slots...when the business traveler wants to travel.