EU extracts London slots as price for airline merger

The European Commission told British Airways and American Airlines yesterday that they would have to give up as many as 267 take…

The European Commission told British Airways and American Airlines yesterday that they would have to give up as many as 267 take-off and landing slots in London as the price of winning approval for their controversial alliance. Irish airlines Ryanair and Aer Lingus are expected to express an interest in the slots which are at Heathrow and Gatwick airports. However, competition from other airlines will be keen because of their onward international connections and the fact that no new slots are currently available.

Ryanair's commercial director, Mr Tim Jeans, said last night that his airline would not be interested in Heathrow slots, because the airport charges were too expensive and it took more than 30 minutes to turn the planes around after landing. However, Ryanair operates four flights to Gatwick and Mr Jeans said the company would be interested in extra slots, provided they were at suitable times.

It is unclear how the slots will be reallocated and who will get them.

An Aer Lingus spokesman said the airline would wait until the Commission published its full ruling before making a decision. Aer Lingus already operates a number of flights to both London airports and is expected to vie for further slots. It recently announced that it was putting on six new planes, increasing capacity on its London route.

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Mr Pat Byrne, chief executive of CityJet, which operates flights to London City Airport, said his airline would look at the availability of slots once the alliances gained full approval. However, he said these airports were more suitable for larger aircraft and CityJet would be more interested in developing its onward long-haul business from Charles De Gaulle Airport in Paris, which it already serves. The European Commission, which is responsible for ensuring fair competition in the 15-nation European Union, also gave a provisional blessing to the link-up between Germany's Lufthansa, Scandinavian Airline System (SAS) and American carrier, United Airlines, on condition that they cede up to 108 slots in Copenhagen and Frankfurt.

EU Competition Commissioner, Mr Karel Van Miert also announced that companies involved in both alliances would have to reduce the frequency of their flights between their respective hubs if that was the only way that competitors could gain access to provide rival services.

Unveiling the long-awaited ruling, Mr Van Miert said the conditions attached to approval were designed to prevent the companies using their dominant position on key routes to stifle competition in a way that would ultimately lead to higher ticket prices for travellers.

"These conditions are necessary and I hope they will be sufficient to ensure that other competitors can operate on the routes concerned," he said.

Full details of the conditions are to be published in the next month and put to the companies involved and the competitors who raised objections to the alliances for comment.

This could possibly lead to fresh hearings before a definitive decision is made. British Airways was reported as being unhappy about giving up some of the slots, saying the conditions were a bit harsh and could lead to job losses. "We have decided on the conditions but this is not the end of the procedure," Mr Van Miert said.