BA deal sets clock ticking for ‘open skies’ agreement

Date: 13/06/1996

By Tim Jones

THE race is on for Transport Commissioner Neil Kinnock to stave off a bilateral UK-US deal to open up Heathrow, Europe's largest airport.

News this week that British Airways and American Airlines had decided to form the world's biggest civil aviation alliance has concentrated minds in the European Commission in the run-up to next week's meeting of EU transport ministers in Luxembourg.

In return for granting the alliance immunity against anti-trust suits, the US authorities have already made it clear that they want a wide-ranging 'open skies' agreement with the UK.

They already have such deals - which recognise the right of airlines to offer extra capacity without prior authorisation - with many EU member states. The recent agreement with Germany was the most prized yet, but Heathrow would be the jewel in the crown.

Kinnock has warned that signing bilateral deals with the Americans makes the Union weak and could lead to the opening of the EU's market to the US with nothing in return.

The language used by American officials and BA executives following the announcement has certainly worried the Commission.

While London has fought tooth and nail against increasing US access to Heathrow, changes in American rules on foreign ownership of airlines could be negotiated in return for increasing the ability of US airlines to fly to other European destinations from UK airports.

The Kinnock team was yesterday (12 June) considering the significance of the news from BA and American Airlines and the outcome of key talks the previous day between the Commissioner and Portuguese Transport Minister João Cravinho.

If Kinnock manages to win Cravinho over to his side in favour of joint negotiations with the Americans, he will be in a position to win a qualified majority vote over the French and British at the 17-19 June ministerial meeting.

The compromise mandate to be presented to transport ministers takes account of French and Portuguese worries about immediately negotiating with Washington over 'traffic rights'.