American likely to join lawsuit fight Carrier is expected to aid British Airways in battle against USAir

Airlines

September 27, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

American Airlines is expected to join British Airways PLC today in asking a federal judge to dismiss a lawsuit filed against the two airlines by USAir.

The request is the second recent development to underscore tension between British Airways and its partner, Arlington-based USAir Group Inc. The two partners are fighting over British Airways' proposed alliance with AMR Corp.'s American.

Robert Ayling, British Airways CEO, told the USAir board of directors Wednesday that the company has no intention of selling its 24.6 percent stake in USAir, the largest carrier operating at Baltimore-Washington International Airport. He also said he wanted USAir to be part of a marketing alliance that would be formed by British Airways and American.

"Bob has made our position perfectly clear," British Airways spokesman Sandy Gardiner said yesterday.

USAir is trying to sever its ties with British Airways because of the proposed alliance, which is subject to approval by the U.S. Department of Transportation.

Richard Weintraub, a spokesman for USAir, wouldn't comment on Ayling's discussion with the board. He said Ayling's statement was not a surprise.

In a suit filed in July, USAir argued that the alliance would hurt airline competition and violate the terms of USAir's own alliance with British Airways.

The lawsuit, filed in U.S. District Court in New York, said the alliance would violate U.S. antitrust laws that are designed to protect competition.

British Airways asked for dismissal of the suit last week. Accusing USAir of "corporate amnesia," the London-based airline said USAir's former chairman had called British Airways' discussions with American "perfectly acceptable."

Chris Chiames, a spokesman for Dallas-based American, wouldn't discuss the company's filing with the court. He said, "Going back to when the lawsuit was filed, we were taken by surprise and mystified by the lawsuit. We have no sense of USAir's logic."

In June, British Airways and American Airlines announced their agreement to coordinate passenger and cargo business, share frequent-flier programs and enable passengers to fly across both carriers' networks as if they were one airline. The American-British Airways deal -- scheduled to begin April 1, 1997 -- would be the largest in a series of recent alliances between U.S. and European carriers.

Three years ago, British Airways entered into a similar arrangement with USAir. British Airways acquired its 24.6 percent stake in USAir for $450 million. The deal gave USAir badly needed cash and gave British Airways access to USAir's extensive East Coast network.

Because of that alliance, USAir contends that it gave up valuable routes to London, including one from BWI to Gatwick Airport. It also redeployed aircraft and employees, changed its schedules and took other initiatives to boost its partnership with British Airways.

Weintraub, the USAir spokesman, said USAir doesn't understand the nature of the proposed marketing alliance. "British Airways has refused to hold discussions unless we drop the lawsuit," he said. "That's a non-starter."

But British Air and American spokesmen said both airlines have had independent discussions with USAir. The companies have not released details of how the alliance would work.

Said Gardiner, "Our whole thinking was first of all to make sure USAir knew we were having talks, to make sure we briefed them in the event of a deal and to make sure they realize what benefits will come from the alliance."

Pub Date: 9/27/96

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