Seeking A New World Order in the Skies

NOT SINCE THE DAYS OF THE RED BARON HAVE THE transatlantic skies seen such a dogfight. The global consolidation of the airline industry is moving into a cross-border phase, led by the desire of American carriers to secure overseas markets and foreign airlines to buy stakes in some of the weaker U.S. operators. These initiatives have triggered a war of words between European and American transportation officials. In reaction to British Airways' bid to acquire a 44% equity stake in financially troubled USAir, a trio of American airlines has closed ranks to oppose the deal, unless they are granted greater access to British markets. At the same time, the German parliament's Transport Committee threatened to terminate its 1955 air treaty with the U.S. if the Americans did not open more airports to German airlines. The parliamentary salvo is seen as a pre-emptive strike in support of Lufthansa German Airlines' bid for the bankrupt U.S. carrier Continental Airlines.

The disputes are heating up as U.S. carriers prepare for 1993, when Europe's skies are scheduled to be deregulated as part of the Continent's push for a single market. While some European countries, like the Netherlands, support ending most limits on flights for U.S. carriers, others favor more restrictions. U.S. Transportation Secretary Andrew Card hinted that unless other countries open their skies to American carriers, foreign airlines could face limited access to U.S. cities. European airlines are eager to tap the American pool of 600 million passengers a year, which represents 40% of the world market. Secretary Card met last week for the first time with British Transport Secretary John MacGregor to help hasten a decision by Card on whether to approve the British Airways-USAir deal.

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CREDIT: [TMFONT 1 d #666666 d {Source: Department of Transportation}]CAPTION: Major alliances between U.S. and foreign carriers