Clinton urged to ditch UK air treaty: American Airlines chief steps up war on BA-USAir deal

ROBERT Crandall, chairman of American Airlines, yesterday called on the Clinton administration to renounce the bilateral air treaty with Britain in a last-ditch attempt to force concessions from the UK in the row over the British Airways- USAir link-up.

Revoking the treaty, known as the Bermuda 2 agreement, would put a freeze on BA's investment in USAir and stop its code-sharing arrangement with the carrier. But it could also seriously hamper Virgin Atlantic's US expansion plans.

The US Transportation Secretary, Federico Pena, has to decide by 17 March whether or not to allow BA and USAir to continue code- sharing. This is the arrangement whereby BA is able to offer through flights across the Atlantic to destinations within the US it does not serve but which are part of USAir's domestic network.

In return for continued code- sharing rights, US airlines want increased access to Heathrow and beyond into the rest of Europe.

Yesterday, however, Mr Crandall, the most vociferous US critic of the BA-USAir deal, went still further, arguing that what was needed was a 'worldwide aviation agreement that would permit any airline to fly wherever it chose and charge whatever it wished without regard to the country in which its office happened to be located'.

Speaking in London yesterday, Mr Crandall said that BA should only be allowed to link up with USAir if US airlines were permitted the same access and economic opportunities in countries they

Later he told a lunch organised by the Canadian and American chambers of commerce: 'At this point it appears that nothing short of US renunciation of the US-UK bilateral will send a signal clear enough to drive home US unwillingness to tolerate the continuing imbalance of economic opportunities now available to the carriers of the two countries.'

The BA-USAir agreement fooled passengers into thinking they were flying an entire journey on one airline, he added.

Britain has threatened to ban US flights into Heathrow if the code- share agreement is not extended. But Mr Crandall warned that the US would win any 'retaliatory game of tit-for-tat'.

One of the obstacles to granting US carriers more access to Heathrow is the shortage of take-off and landing slots. Mr Crandall said this could be overcome by trading slots as happens in the US, where they can change hands for dollars 6m- dollars 8m. He also backed the idea of 'perimeter rules' at London's three airports to reduce congestion at Heathrow and encourage more long-haul airlines to start using Stansted.