British Airways announced on July 21 that it has agreed to buy a 44% stake in USAir for $750 million. If the deal, which was expected, wins approval from the Transportation Dept., it would create a formidable new competitor in the increasingly international airline industry. The venture would have even more firepower if USAir acquires assets from TWA, as industry sources predict.
While the BA-USAir accord is likely to receive Washington's approval, the U.S. may drag its feet to win concessions from Britain in bilateral negotiations over their airline treaty. The Bush Administration wants expanded operating rights for American carriers landing in Britain.