ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, December 7, 1996 TAG: 9612090022
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
DATELINE: LONDON
SOURCE: DIRK BEVERIDGE ASSOCIATED PRESS
British Airways and American Airlines must give up valuable takeoff and landing slots at Heathrow Airport or face full scrutiny of their proposed alliance, regulators said Friday.
British Airways and American, the two biggest carriers in the U.S.-Britain market, had previously said such a price would be too high and would kill their deal. On Friday, however, they appeared to show a change of heart.
British Trade Secretary Ian Lang threatened to order a full-scale monopoly investigation if the carriers didn't give up slots, which could allow about 12 new daily transatlantic flights by competitors.
American Chairman Robert Crandall expressed concerns that Lang's terms are stricter than those imposed by other countries whose carriers have cut deals with U.S. airlines, such as the partnerships between United Airlines and Germany's Lufthansa, or Northwest Airlines and KLM Royal Dutch Airlines.
He said further review of the offer was needed.
But British Airways chief executive Bob Ayling said he would go along with ``reasonable steps to assist in the introduction of additional competition.''
Rival airlines have complained that the American and British Airways deal would control 60 percent of the crucial U.S.-Britain air market.
British Airways and American hope to join forces over the Atlantic and essentially operate as one airline - setting fares and sharing revenues although they would continue to fly under their own names.
A probe by the Monopolies and Mergers Commission could delay - or even destroy - the British Airways-American alliance.
But the competing airlines - like Virgin Atlantic Airways - complained that Lang's request didn't go far enough.
``We don't want to talk about slots,'' Delta Air Lines spokeswoman Corrie Shanahan said in London. ``We don't want the alliance.''
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