The European Commission's latest drive to secure external competence in aviation matters is little short of a public relations disaster. But then the way most parties have acted during the response period to the UK's Office of Fair Trading report on the proposed British Airways-American Airlines alliance reeks of bad judgement and double standards.

The way Karel van Miert, the European competition commissioner, set about warning the UK government not to rule on the alliance without coordinating with Brussels played into the hands of right-wing UK politicians. The Eurosceptics in the ruling Conservative party will now throw their weight behind trying to ensure the proposed deal is approved without the Commission having its say. This could mean the UK government is now even less inclined to cooperate with the Commission. 'I don't pretend [the Eurosceptic intervention] is going to make the job any easier, but it has drawn a lot of British support and will help us keep Brussels out,' says one senior BA source.

But van Miert is not the only guilty party. Late last year transport commissioner Neil Kinnock was quite categoric in his support for slot trading, leading BA to believe that it could sell any slots it was forced to relinquish at Heathrow. In early January, Kinnock changed his mind after considerable pressure from van Miert, who claims the current slot regulation does not provide for trading. BA still maintains that it will sell the slots it is being asked to give up by the OFT. 'We have taken legal advice and don't see [selling the slots as] a problem,' says the BA source.

A senior Commission official points out that it is 'ridiculous' for BA's chief executive Bob Ayling 'to say the alliance has nothing to do with Brussels as he has been to see both van Miert and Kinnock a couple of times to discuss the issues.'

Similarly, US carriers 'outraged' at the idea that BA should be able to sell its slots at Heathrow must have conveniently forgotten about how 'TWA and Pan Am were allowed to rescue shareholder value when they sold their Heathrow operations in 1991,' says the BA official.

Likewise, the OFT must bear its portion of the blame by thinking it could appease all the US carriers seeking access to Heathrow with 168 slots, which translates into 12 daily return services. Continental's chief executive Gordon Bethune says his carrier would need 140 slots at Heathrow to mount credible competition against the alliance - a request, he says, the UK originally saw as 'modest.'

What shouldn't be overlooked is the fact that US-UK talks are still bogged down - the next round of talks are scheduled for early February - and without open skies the alliance is going nowhere. BA-AA filed for antitrust immunity in the US in early January, so the fun and games should start again in Washington during the show cause stage which could take place in March.


Source: Airline Business