Maryland and the airline titans

January 06, 1993

Maryland is an innocent bystander caught in the middle of battle between titans. One pair of titans is USAir, the dominant air carrier at Baltimore-Washington International Airport, and British Airways, which is bidding to become the largest international airline through a virtual merger with USAir. Arrayed against them are the three strongest U.S. airlines, American, Delta and United, which are battling to prevent the combination.

Simultaneously, the Bush administration is trying to induce the British government to relax the tight grip British Airways has on Heathrow Airport just outside London, a major international hub and choicest gateway to Europe for trans-Atlantic travelers. Andrew H. Card Jr., secretary of transportation and the administration's point man on the landing-rights agreement, would not approve the USAir deal without more access for U.S. airlines at Heathrow. The British have balked -- perhaps because of pressure from British Airways, which has withdrawn its merger proposal.

All this is of more than casual interest to Marylanders, including those who don't plan to fly across the Atlantic any time soon. USAir accounted for two-thirds of the traffic at BWI until a recent slump, but it still handles more than half the business there. Like most U.S. airlines, it is struggling in the recession. It also carries a heavy debt burden and is in weaker financial shape than its three major competitors. The infusion of $750 million proposed by British Airways would have vastly improved its health.

USAir has already cut back its services at BWI. A substantial withdrawal from the airport, which is one of USAir's regional hubs, would be a devastating setback for BWI. A strong, well-served airport is a vital factor in the state's economy, which has enough problems without a faltering BWI.

So far the threat to BWI is more apparent than real. Airline revenues have turned upward, and USAir is not in danger of failing for at least another year. The two airlines have agreed to explore other ways of cooperation, not requiring government approval. In the meantime, the incoming Clinton administration will take over the negotiations with the British over landing rights. There is some tough negotiating ahead, but there is room for compromise unless British Airways abandons any hope of entering the lucrative U.S. market in a big way. In the meantime, the major U.S. airlines will continue raising pious legal objections in their effort to keep USAir in the role of weak sister.

Maryland's interests clearly lie in a strong USAir serving a bustling BWI. The country's interests lie in greater domestic airline competition. Four vigorous U.S. carriers are better than three.

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