Justice Opposes Airline Alliance

The Justice Department is opposing the proposed alliance between American Airlines and British Airways unless the United States and United Kingdom eliminate government-imposed restrictions on flights and prices between the two countries.

Justice Department officials Thursday urged U.S. transportation officials to reject the alliance. Under the partnership, American would coordinate its passenger and cargo service with British Airways.

The Justice Department also said other airlines also should be given enough takeoff and landing slots to run 24 additional daily round trips between London's Heathrow Airport and cities in the United States.

"Significant slots and restructuring are absolutely necessary to preserve and expand consumer choice in this large and growing transatlantic market," said Assistant Attorney General Joel I. Klein, who heads the antitrust division.

The Transportation Department and American Airlines seemed to agree.

Transportation Department spokesman Bill Schulz, while declining to comment about the Justice filing, said: "The administration has long said that open skies with the United Kingdom and competitive access at Heathrow are prerequisites to antitrust immunity."

In a statement, American Airlines said: "We look forward ... to the negotiation of an open skies agreement between the U.S. and the U.K., a precondition we have always supported."

The Transportation Department is to decide whether to approve the alliance. It would give American and British Airways control over 65 percent of the daily round-trip flights between the United States and Heathrow.

In April, American also announced plans to coordinate some of its operations with US Airways, including allowing passengers to use frequent flyer miles on each other's flights.

American and British Airways have argued they needed to pool resources to compete with other partnerships, such as those between United Airlines and Lufthansa and between Northwest Airlines and KLM Royal Dutch Airlines.

Written by Jonathan D. Salant