UK threatened to pull out of open skies if BA / AA deal not approved
15.02.11
A senior British civil servant warned that UK could pull out of the transatlantic open skies agreement if the US did not approve BA's proposed tie-up with American Airlines, according to US embassy cables obtained via WikiLeaks the Guardian reports. Britain threatened to pull out of the agreement if the US government did not approve British Airways' alliance with American Airlines, a senior British civil servant warned US embassy officials.
Another British civil servant told American officials that Spain may see progress on securing agreement on Open Skies and on the alliance – which includes the Spanish airline Iberia – as ‘being closely linked’, a second cable reported.
This cable concluded: ‘DfT [the Department for Transport] noted that Spain, which will host the next round of air transport negotiations, may be more willing to agree to second-stage negotiations if the US department of transportation grants Iberia airlines (along with British Airways, American Airlines and others) anti-trust immunity.’
Less than a fortnight after the 3 February 2010 private meeting at the DfT offices in London, referred to in the second cable, the US government demanded far fewer concessions than expected in return for approving the alliance, which BA had been pursuing since 1997. In March 2010, the EU also signed a draft agreement to extend the Open Skies agreement, with analysts commenting that Europe had failed to win any concessions on a deal that continues to favour the US.
The agreement prevents EU airlines from flying domestic flights in the US, even though US airlines are allowed to fly point to point within Europe. European airlines also remain barred from buying a controlling stake in an American airline. It was suspected at the time – but not proved – that EU countries did not exercise their right to suspend the Open Skies deal because they feared the US would retaliate by blocking transatlantic tie-ups such as BA's with American Airlines, the newspaper reports.
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