Frank Swoboda and Don Phillips in Washington
USAir Chairman Stephen M Wolf says there is no room for his airline in the proposed international marketing agreement between American Airlines and British Airways (BA).
“We simply do not believe we can be a part of it,” Wolf said, signalling a further rupture in the relationship with BA, which owns 24,6% of the carrier. BA purchased the stake in 1993 for $400-million as part of a financial rescue package.
USAir petitioned the United States Department of Transportation last month for the right to fly to London’s Heathrow Airport from its hub facilities in Boston, Charlotte, Philadelphia and Pittsburgh.
But the new route authority would depend on the US and British governments negotiating an “open skies” agreement. The negotiations are stalled, with little likelihood of any meetings soon.
American and BA proposed a broad transatlantic marketing agreement last June that, if approved by their respective governments, would allow them to dominate transatlantic flights between the US and London. Both carriers said they welcomed USAir’s continued involvement in the new alliance, but have yet to spell out how such an arrangement would work.
Wolf said communication between USAir and BA has basically ceased since USAir filed suit in late July seeking to break up its alliance with the foreign carrier, claiming that BA’s proposed relationship with American was a betrayal of USAir.
Wolf said he did not believe the US government would give USAir the necessary antitrust immunity to participate in the American-BA alliance.
The Transportation Department is not expected to rule on the American-BA request for antitrust immunity until late in the year.
Wolf reaffirmed his belief that USAir has to grow well beyond its $8-billion in gross annual revenue, and repeated his warning that the airline might not have enough time available to grow by itself. — The Washington Post