Open Skies, Open Airports

November 18, 1992

The amount British Airways proposes to invest in USAir was misstated in an editorial Wednesday. It is $750 million.

The Sun regrets the errors.

The U.S. Department of Transportation has sent two clear signals to the international airlines and the foreign governments which own, regulate or coddle them. First, the Bush administration is willing to approve what amounts to mergers between struggling U.S. and foreign airlines. The second is that it wants to increase competition among all airlines by lifting the restrictions that seriously limit their ability to serve foreign markets and pick up passengers as they move around the world. Both signals have great significance for Maryland travelers and the Baltimore area's economy.

The signals from Washington came in DOT's tentative approval of an agreement between Northwest Airlines and KLM Royal Dutch Airlines which would allow them to operate virtually as a single entity, though legally they would remain separate. Both airlines need to attract passengers from wider markets, and this agreement would enable that. The agreement is very much like the proposed pact between USAir and British Airways, which awaits a decision by DOT within the next five weeks.

FOR THE RECORD - CORRECTION

But the similarity between the two plans does not assure approval of the USAir deal with British Airways. That's where the second signal from DOT comes in. A month ago the U.S. and Netherlands governments agreed to open their airports to each other's airlines without the limits that stifle competition elsewhere. The U.S. landing rights agreement with Britain is one of the most restrictive, and the two governments are negotiating a new one. Prodded by USAir's competitors, the Bush administration is seeking similar concessions from the British. A final agreement is not likely by the Christmas deadline for approval of the USAir-British Airways plan, but a clear signal from London that it is prepared to open its airports to more flights by U.S. airlines in general would clear the way for DOT approval.

Completion of the USAir deal is critical to the state's economy. USAir is by far the major carrier serving Baltimore-Washington International Airport. While it is not in as dire financial condition as some other U.S. airlines, it badly needs the $450 million British Airways would invest if the agreement is approved. USAir's stronger domestic competitors don't like this arrangement. Rather than limit competition, as they argue, it would in fact strengthen USAir as both a domestic and international carrier.

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