
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, April 29, 1993                   TAG: 9304290065
SECTION: BUSINESS                    PAGE: B7   EDITION: METRO 
SOURCE: Journal of Commerce
DATELINE:                                 LENGTH: Medium

WILL NASHVILLE BID FOR USAIR ROUTE TRULY FLY?

Nashville turned the aviation world on its head when it agreed to pay USAir $5 million to transfer its Charlotte, N.C.-to-London route to Nashville, where it would be operated by American Airlines at its hub there.

In the history of U.S. aviation, no airport has ever paid for the transfer of an international route on behalf of a U.S. airline.

Nashville's unprecedented plan is winning praise as an innovative way to boost the city's standing in the world. But it also has raised questions about whether such a transaction can be consummated.

The airport's board of commissioners agreed Wednesday to proceed with the proposal. In the meantime, the airport and American have begun hammering out the particulars of an agreement, said Carole Martin, a spokeswoman for the airport authority.

It is unclear whether American, which has pursued Nashville-to-London rights for nearly two years, will actually pay the city for the right to fly the route. American officials were unavailable to comment.

The Charlotte-London route is one of three that USAir must divest under terms of government approval of a financial and operating alliance with British Airways.

Northwest Airlines has laid claim to USAir's Baltimore-London route, which it plans to move to Detroit. Both American and United Airlines have applied for transfer of USAir's Philadelphia-London certificate.

Industry observers said Nashville's proposal provides it with the economic benefits that normally flow from the launch of international air service.

"It's a creative and fairly clever tactic on Nashville's part. It puts them right in the middle of the action," said Jeffrey N. Shane, the Bush administration's top international aviation policy-maker and now a Washington attorney.

Not everyone is pleased.

Raleigh-Durham Airport, another American hub vying for the Charlotte-London route, contends that no airport has the right to pay for international routes, because they are owned by the U.S. government.

"The routes were awarded as a public asset. They were not awarded to be sold," said Teresa Damiano, an airport spokeswoman.

The Department of Transportation, which must approve the transaction, may face a predicament: Federal aviation law prohibits an airport from holding an international route certificate.

by CNB