British Airways Is Upbeat On U.K.-U.S. Aviation Talks
May 03, 2011
British Airways said it is confident that and the U.S. will be able to reach a new aviation agreement, despite current differences over the ability of U.S. carriers to land in and then fly onward. A liberalized U.S.-U.K. aviation treaty is seen as a prerequisite for the proposed alliance between British Airways and AMR Corp.'s American Airlines. ``We are not aware of any difficulties in the talks,'' said a British Airways spokesman. ``We would only hope and expect that the U.K. government would hold out for the best deal possible. This is a normal negotiating position.'' The carrier's comments came as its shares slumped following a report that talks between and are snagged over the issue of ``beyond rights'' -- or the ability of U.S. carriers to fly to and then fly on elsewhere. British Airways was at 530 pence on the London Stock Exchange, off eight pence a share. A Major Hurdle It's been clear for some time, however, that the issue of beyond rights is one of the major hurdles to a new U.K.-U.S. agreement, and industry experts said published comments by U.K. officials that they couldn't agree to U.S. demands on the matter were just a standard part of the negotiating process. Such rights are included in a U.S.-German ``open skies'' deal finalized earlier this year, but people familiar with the negotiations caution that there are key differences between the and U.K. situations. Following World War II, carriers from the U.S. obtained significant beyond rights from German airports, while such rights haven't existed from U.K. airports. In addition, it's clear that greater access to the for U.S. carriers will be played off against beyond rights in the U.S.-U.K. talks, whereas there was no U.S. airport capacity issue in the U.S.-German talks. EU Review The British Airways spokesman expressed confidence that a U.S.-U.K. agreement could be reached in time for the proposed deal with American Airlines to take effect as scheduled next April. U.S. officials have made clear that they won't grant antitrust immunity to the British Airways-American Airlines linkup unless a liberalized U.S.-U.K. aviation agreement is struck. The proposed airline alliance also faces other obstacles, including a review by European Union competition officials and a lawsuit filed by USAir, in which British Airways has a 24.6% stake. Talks between the and U.S. governments are slated to resume in next week on technical matters, with negotiations on substantive issues expected to be held in sometime next month. Separately, the chief executive of British Airways said the carrier had no plans for additional alliances over the next few years, but would instead focus on new franchising arrangements. ``One of the great challenges of alliance development is the management challenge, and I think it would be unwise to take on any more than we can absorb at any one time,'' CEO Roberto Furst told Australian journalists in .
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