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David Learmont, Flight International
"This industry is out of step with the rest of the world"
 real 28k

Friday, 28 January, 2000, 16:37 GMT
Heathrow-US flight talks fail

British Airways tailfins BA does not want to lose its share of Heathrow flights

The UK and US governments have failed once again to agree on rules for allowing more airlines to fly between London's Heathrow Airport and North America.

A string of airlines from both countries had hoped to end the current stranglehold by just a few carriers on all flights taking these routes.

A spokesman for the Department of Transport said: "The fact is we couldn't reach an agreement ... we just reached an impasse."

The current agreement allows only British Airways, Virgin Atlantic, American Airlines and United Airlines to fly direct scheduled flights between Heathrow and the US.

Madonna Heathrow is a plumb gateway for US travellers
But other airlines, which have seen the large profits that can be raked in on what is a restricted market, have been keen to enter the fray.

Officials from US carriers followed political negotiators across the Atlantic to push for more access at Heathrow.

But British Airways urged UK officials to back down on a proposal that would threaten its lucrative dominance at the world's busiest international airport.

The UK government's proposal would allow BA's smaller rival British Midland to start four new daily services to the US from Heathrow in return for up to four new flights by one or two new US carriers.

Virgin opposition

This "mini deal" proposal is an attempt to get a breakthrough in the long running stalemate in talks to open up air travel between the UK and the US.

"Going from four to seven airlines is a significant increase. And even though it would be a mini-deal, for those of us who have been frozen out, it's a ray of sunshine," said Scott Yohe, senior vice-president for government affairs at Delta, one of the US airlines hoping to gain access to Heathrow.

But a Virgin Atlantic spokesman said they were opposing the mini deal because it might delay the large scale open-skies agreement they wanted.

BA, which has seen its profits tumble, does not want any new competitors on the Heathrow-US link and wants talks to focus on a proposal to allow US Airways to fly from London's Gatwick to Pittsburgh.

Attractive gateway

BA also wants the US government not to stand in the way of its request to deepen its commercial partnership with American Airlines.

Despite both countries' strong talk on free trade, the UK is one of the few European countries which does not have an "open skies" deal with the US.

British Midland has been lobbying hard to be allowed access, saying that the lack of competition at Heathrow has penalised consumers.

Heathrow is a very attractive airport to US airlines because it is their biggest gateway into Europe.

Because of the huge number of business travellers passing through Heathrow, operating at the airport can generate much higher profits for airlines.

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See also:
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BA faces stiff competition
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