Brits Willing to Bargain on Heathrow Access
COSTA MESA — Despite a huge loss on its investment in USAir Group, British Airways wants permission to buy up to 49% of a U.S. airline in exchange for giving American carriers more access to London’s prized Heathrow Airport, British Airways’ chairman said Wednesday.
Foreign airlines are currently limited to owning 25% of a U.S.-based carrier, and “that is a bone of contention from the U.K. standpoint,†Sir Colin Marshall said in an interview.
That dispute and others have dogged a 2-year-old effort by U.S. and British negotiators to agree on a liberalized aviation treaty. The talks collapsed again two weeks ago in London, but U.S. Transportation Secretary Federico Pena agreed to resume the negotiations Oct. 16 in Washington.
U.S. airlines have been pressing for greater access to British airports, primarily Heathrow, where, under a 1977 bilateral agreement, American and United are the only U.S. carriers allowed to land.
But in exchange, British Airways and other British carriers want the ability to invest more heavily in U.S. airlines, along with the increased ability to carry U.S. government employees and the U.S. mail--rights that are now heavily restricted to American-based carriers, Marshall said.
“You do not make concessions without getting something back,†he said. Until then, “the only real lever that the U.K. has is Heathrow†and its restrictive landing rights, he added.
Rob Britton, American Airlines’ managing director for regulatory affairs, said American supports greater foreign investment “provided that the aviation relationship†between the two countries “is an open and liberal one. That condition clearly does not apply at the current time with the U.K.â€
Britton also noted that increased foreign ownership of U.S. airlines “is not something U.S. negotiators can give away,†because it “would take an act of Congress to change the law.†That hobbles the U.S. negotiating effort, he said.
Marshall said USAir’s troubles have not dissuaded British Airways from seeking further ownership of U.S. airlines, although he said British Airways is not currently mulling an investment in any other U.S. carrier.
British Airways bought 25% of USAir in 1993 for $400 million, but in May it wrote off half that investment because of severe losses at USAir.
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