Getting Extra Mileage From British Air
The interests of the airline industry and the flying public don't always dovetail, but British Airways' proposal to buy 44% of USAir for $750 million could be one of those happy conjunctions on both sides of the Atlantic. Much depends on how adept the Bush Administration proves to be at tackling some of the important issues the deal raises.
The transaction has obvious pluses for the two airlines. Ailing USAir desperately needs an injection of funds, while British Airways gains a feeder network in the world's richest market. For American consumers, the transaction provides a fourth major player in the U.S.--one whose heft and skill can bring new competitive juice to a market dominated by American, United, and Delta.
The BA-USAir deal has the potential to bring far broader benefits, however. American, United, and Delta have been arguing--with much justification--that U.S. negotiators should insist on concessions from the British for U.S. carriers, including more liberal operating rights in Britain and the right to fly on to cities on the Continent.
But expanded rights in Britain itself are not enough. When the deregulation of Europe's airline industry begins in January, 1993, British Air will become a European airline. So while the U.S. pursues reciprocity in London, it should seek talks with the European Community, which increasingly will represent its member countries on such issues.
Washington should give the BA-USAir marriage thumbs up. But it should do so in a way that signals U.S. determination to participate in the increasingly open competition in Europe. If Europe opened fare structures and landing rights to all comers, their state-owned airlines would have to be run like efficient businesses instead of subsidized monopolies. And that would benefit airline customers around the world.