UK and US negotiators kept to uncontentious issues such as ground handling and customs procedures during the latest round of bilateral talks in London in December 1996. Any breakthrough seems unlikely before the UK Office of Fair Trading and US Department of Justice rule on the proposed British Airways-American Airlines deal.

Both sides would have to make serious concessions before any move to open skies and 'neither showed flexibility on major contentions' says a source involved in the talks. 'Headline items such as cabotage, foreign ownership rights and future alliances will be parked until the end game.'

However, even the seemingly mundane agenda still highlighted divisions between the sides, with the UK firmly resisting Washington's efforts to impose its own security standards. The US negotiators display 'breathtaking extra-territoriality even by US standards,' observes one UK official.

While the UK continues to resist US pressure for an open skies deal like those signed by 12 European countries, lobbying for and against the proposed BA-AA deal continues. United Airlines proposed that BA-AA surrender a total 48 daily slots at London/ Heathrow, New York/John F Kennedy and Chicago/O'Hare, while Delta Air Lines takes an even harder line.

'We can't envisage any concessions which should allow the deal to go ahead,' says Scott Yohe, senior vice-president government affairs.

A statement of objections issued by the European Commission look set to stall the proposed deal even longer. Despite BA's contention that Brussels lacks jurisdiction over the case, 'the Commission is still able to stop the alliance under Article 89,' says a Commission source.


Source: Airline Business