The European Union's threat to block the proposed alliance between British Airways PLC and American Airlines Inc. has provoked an outcry in Britain. That's not surprising. Brussels' record on opening Europe's skies has been less than stellar, making it vulnerable to charges that it is trying to protect BA's continental rivals.
The EU says it fears that the BA-AA deal will restrict competition on all routes between Britain and the U.S. for other European airlines. But while BA has been painfully refashioning itself into a globally competitive, streamlined giant, Brussels has been subsidizing its rivals, such as Iberia and Air France, to the tune of billions of dollars. BA's complaints about the subsidies to EU bureaucrats have fallen on deaf ears.
The EU has also taken its time in breaking up the cushy system that lets European airlines charge mammoth fares on many routes. And there was nary a peep from Eurocrats about previous transatlantic alliances, such as Delta Air Lines' with Lufthansa and KLM Royal Dutch Airlines' with Northwest Airlines, though now, they're suddenly taking an interest. It's not even clear that the EU has any jurisdiction in the matter. London is convinced that aviation policy outside Europe remains the prerogative of the nation in question, not the EU.
Eurocrats would be wise to let Britain and the U.S. determine the fate of the BA-AA alliance. Sure, that potential dominance of the sky lanes between the U.S. and London's Heathrow Airport is troubling. But Britain and the U.S. are best qualified to work that out. British regulators have already told the airlines that they won't let the deal go forward unless the partners give up some 168 takeoff and landing slots at Heathrow--90% of American's stable. The U.S., prodded by Delta, United Airlines Inc., and others, will probably demand tougher concessions as well. It's hard to see what the EU can accomplish except to further alienate Britain and muck up already complicated negotiations.