Van Miert to set rules for airlines link

Date: 02/07/1998

By Chris Johnstone

AFTER innumerable delays, Competition Commissioner Karel van Miert is set to deliver his conditions next week for clearing alliances between British Airways and American Airlines and Lufthansa/SAS and United Airlines.

But it will be the end of the beginning, rather than the beginning of the end of a saga which began just over two years ago when the Commission launched its investigations into the deals.

Third party consultations, the need for approval from national competition authorities and other procedural steps could mean the airlines involved will have to wait until at least Christmas before the Commission finally clears their alliances.

BA still has to win separate approval from US authorities, with their final decision hanging on the UK government delivering an acceptable UK-US 'open skies' agreement.

Van Miert's main demands will focus on the airport take-off and landing slots which must be given up by each airline alliance. Lufthansa and its partners face demands for around 100 weekly slots to be surrendered, mainly at Frankfurt airport, while BA and American will be told to hand over some 270 weekly slots at London's Heathrow and Gatwick airports.

The demands on BA/AA strike a rough balance between the initial call from the UK's department of trade and industry for only 168 slots to be given up and Van Miert's first estimate that 350 should be surrendered.

Last-minute negotiations have focused on the timing for the hand-over of slots, with the airlines pushing for them to be given up gradually rather than passed on to rivals all at once.

Van Miert's cure for the competition problems posed by the airlines includes a temporary cut in the flights they can offer on key routes and demands that alliance partners' marketing muscle with travel agents should not be abused.

“The devil is in the detail,” said an executive from an airline involved. “We still have not seen the Commission's demands and have a lot of questions that need to be answered.”