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Set Back For BAW / AMR Alliance

Sun Dec 02, 2001 5:47 pm

Daily Telegraph:

Setback for BA American link
By Damian Reece (Filed: 02/12/2001)

PLANS by British Airways to forge a business alliance with American Airlines suffered a setback last week when a key witness in the US government's investigation condemned the tie-up.

Set-back: BA's competitors are demanding greater access to Heathrow
Michael Levine, a Harvard law professor and the architect of US airline deregulation, attacked the proposals, telling the US government that the link would dramatically reduce competition in most markets between Heathrow and America.

The submission will be a blow to BA, which is trying to forge closer links with American in order to bolster its flagging transatlantic business following September's terrorist attacks.

In a submission to the US Department of Transport, Levine, who masterminded Northwest Airline's joint venture with KLM, argued that the proposed tie-up between BA and AA should only go ahead if competitive access to Heathrow is guaranteed for the American partners of other global alliances.

Levine said that unless access to Heathrow for BA's competitors is dramatically improved, the partnership will result in a duopoly operating across the Atlantic, involving the BA/AA alliance and the similar proposed link between United Airlines and BMI British Midland.

"It is my view that the AA/BA filing . . . should be thwarted either by disapproving immunity or insisting on removing barriers to airport access by competitors," said Levine.

"If these applications are approved without access conditions, they will allow American and United and their non-US alliance partners to create the only two global networks with broad access to London Heathrow and Tokyo, both key airports for high-yield business travel."

A spokesman for BA rejected Levine's claim that access to Heathrow was too restricted. "It is not true that competitors can't get into Heathrow. United Airlines has massively increased its services out of Heathrow. Virgin Atlantic also now has a very signficant service," he said.
Anyone can fly, only the best Soar.
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RE: Set Back For BAW / AMR Alliance

Sun Dec 02, 2001 5:55 pm

Virgin already said it: "No way BA/AA!"
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RE: Set Back For BAW / AMR Alliance

Mon Dec 03, 2001 2:14 am

It just blows my mind year after year, time after time, that the management of AA and BA and the UK govt. think they can ram this down everyones throat without opening up and guaranteeing the access to slots, gates, and other facilities of LHR to ensure a truly competitve environment. If this strongarm approach was going to work, it would have worked a long time ago. However, I still think that very very soon, BA, AA and the UK will pull a rabbit out of the hat and in some way assure the slots, gates and facilities for all US and UK airlines to operate from LHR in a true openskies fashion like the US has with other countries in europe and the rest of the world. How that will happen, i dont have a clue. If I had the answers, I would be in airport management.Happen though it will, Im sure.In teh end there really is no alternative.Half measures will avail nothing.
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RE: Set Back For BAW / AMR Alliance

Mon Dec 03, 2001 4:18 am

My favorite line is the one by the BA official at the very end of the article. You know, the one where he claims that the idea that BAs competitors cannot gain access to LHR is pure lunacy. Apparently the guy has never heard of Bermuda II or DL, NW, US, CO, and BD and their ongoing fight to gain access to the LHR-US market.
Hughes Airwest - Top Banana In The West
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RE: Set Back For BAW / AMR Alliance

Mon Dec 03, 2001 4:28 am

Isn't LHR running over 100% capacity already?

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