USAir hopes to win DOT approval to fly to London from BWI, Philadelphia

March 16, 1991|By Maria Mallory

The U.S. Department of Transportation's proposal to break up the $445 million sale of Trans World Airlines' London routes to American Airlines appears to have opened a window of opportunity for USAir.

USAir has long expressed an interest in expanding its service to overseas airports. The Transportation Department's preliminary finding, announced Thursday, could provide the opportunity for USAir to pick up the rights to fly to London from its hubs in Philadelphia and Baltimore.

But instead of paying millions for the routes as American had agreed to do, the Arlington, Va.-based carrier could win the business without paying a dime.

The Transportation Department's proposal was based on a finding that American's acquisition of some of the TWA routes "would be detrimental to competition."

Late last year, American Airlines said it would buy TWA's six London routes as part of a plan by troubled TWA to ease its financial problems. TWA agreed to sell the coveted routes for $445 million.

The most lucrative of the routes in the deal were TWA's service to London's Heathrow Airport from New York City, Boston and Los Angeles. TWA's Philadelphia-Heathrow route and its service London's Gatwick Airport from St. Louis and Baltimore also were part of the package.

TWA and American petitioned the Transportation Department to See ROUTES, approve the agreement.

But USAir spoke out against the deal. In a document filed with the DOT in January, USAir suggested that the agency revoke TWA's rights to the Philadelphia and Baltimore routes and open them up for bidding among other carriers.

That would give USAir "the opportunity to demonstrate that it would provide superior public benefits if selected to serve those two routes," the carrier's petition said.

It took several months, but the Transportation Department seems to be seeing things USAir's way.

After reaching Monday's agreement with the British to allow the transfer of Pan Am's routes to Heathrow to United Airlines, Transportation Secretary Samuel K. Skinner opened the door for a similar transaction between TWA and American.

But with Thursday's announcement, Mr. Skinner's department tentatively approved only the New York, Boston and Los Angeles routes of the TWA-American deal.

The agency said it would likely take new bids for the Philadelphia and Baltimore routes. With this action, the new DOT-designated carrier that would replace TWA would assume the rights to the routes without having to buy them, said William Mosley, a DOT spokesman.

In addition, the department said TWA should retain the St. Louis route.

It is the department's preliminary opinion that "the proposed transfer of those three routes would be detrimental to competition," Mr. Mosley said.

DOT has federal authority to allocate international routes and may choose to reassign them in an effort to foster competition among carriers.

Though DOT deems American to be an effective competitor for British Airways, which dominates the New York, Boston and Los Angeles routes, the department said in its preliminary recommendation that "if American were to serve the Philadelphia and Baltimore markets, it would have little incentive to develop -- or promote these gateways," since the carrier already has large operations in New York, Boston and Miami.

Mr. Mosley said the department would take comments on its proposal over the next several weeks and would make final decisions on the six routes sometime after March 29.

"USAir is delighted to have this important opportunity and plans to pursue the BWI-London route aggressively," USAir chief operating officer Seth E. Scholfield said yesterday in response to the DOT statement.

Currently, USAir flies to 71 U.S. cities with 250 daily flights from its Baltimore-Washington International Airport hub.

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