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Wednesday, 13 May, 1998, 18:55 GMT 19:55 UK
Go gets go-ahead
Go plane
Go can take off, but will land back in court later
British Airways has been given the all-clear to launch its new low-cost, no-frills airline, Go.

A High Court judge said BA could go ahead with the launch of the service despite a legal challenge by a rival airline easyJet to block it.

But he said easyJet could still pursue its case in the courts to stop Go.

The airline has said it will bring the full court action against BA in a few months.

Easyjet accuses BA of breaching Article 86 of the European Community Treaty which bans companies from "abusing a dominant position" so as to stifle competition.

The chairman of easyJet Stelios Haji-Ioannou said the clearance to proceed against BA was a victory for the consumer.

"I'm really delighted," Mr Haji-Ioannou said.

"It is the first time a UK judge has acted prematurely on an anti-competition issue," he added.

An 'arguable' case

Easyjet claimed BA was offering huge extra bonuses to travel agents who sell more of its flights, as well as guaranteeing aircraft leases for Go and thus extending its creditworthiness to the new operation.

It also said that BA had failed to give assurances or publish financial statements so the amount of any subsidy can be deduced.

BA had asked Mr Justice Tuckey, to "strike out" easyJet's claim as "unsustainable in law and disclosing no cause of action".

Lawyers for BA said the commercial opportunities offered by competitive de-regulation of European routes and carriers were being exploited by airlines such as easyJet, Virgin, Debonair, Ryanair.

Initially Go will offer flights to Rome, Milan and Copenhagen.

BA rejected further claims that Go benefited from the "halo" or "brand image" effect because customers would believe that a company associated with BA would have higher standards of reliability and safety.

However the judge ruled that easyJet has "an arguable case and one of general importance."

Go is scheduled to start up on May 22 with a flight to Rome.

See also:

31 Jan 98 | Business
BA set to Go
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