France hits at BA in new air war

FRANCE is preparing to ban foreign rivals from making long-haul flights out of Paris's Orly Airport. The move is intended to shelter state- owned Air France from two of its biggest rivals, British Airways and American Airlines which plan to merge, French airport unions said.

The switch would force American to move its Orly long-haul flights to Charles de Gaulle Airport, disrupting its planned links with two BA-owned French domestic airlines, Air Liberte and TAT, which both fly into Orly.

The government is struggling to get Air France, until recently a perennial money loser, into shape for an initial stock sale. The sale was pushed back last week until early 1999, the second delay in as many months. The unions, who fear job losses at Orly, say the planned ban was disclosed to them by the airport operator, Aeroports de Paris.

"It's a clearly protectionist strategy," said Jacques Gentili, general secretary of the FO-Aeroport de Paris union. He said Air France "fears the creation of a hub at Orly with British Airways and American Airlines."

A statement distributed by unions at Orly, in the south of Paris, said they were told by Emmanuel Duret, chief executive of ADP, the airport operator, that its board will discuss on September 24 a planned decree by the French Transport Ministry to limit the airport to flights of 3,000 miles or less. The ban would exclude flights to the French territories like those operated by Air France.

A spokesman for the Transport Ministry confirmed it will discuss the "outlines" of a plan to restrict international traffic at Orly with ADP's board. He would not discuss details, denied the move was aimed at any specific airlines and said the ministry plans more consultations with local officials and unions.

An Air Liberte executive vowed to fight any move, taking legal action in French courts or at the European Union if necessary. "This is something which only aids Air France - it arms them against the competition," said Dominique Gretz, the carrier's head of scheduling.

TAT and Air Liberte, the second-biggest carrier at Orly after Air France, plan to start an agreement with Texas-based American in October to funnel passengers to each other on 27 routes. If American is forced to move from Orly, the agreement's value would be diminished. "We are in Orly, and we want to stay in Orly," said Jacques Alonso, sales manager for American in France.

A spokesman for ADP said the government only wants to establish a "better traffic distribution" between the two airports since Orly faces environ- mental constraints. It is closed at night and is limited to 250,000 take- offs and landings a year while Charles de Gaulle has about 400,000.

Almost 40 carriers have operations at Orly, including AOM, France's second biggest airline, which flies to destinations including Havana, Sydney and Los Angeles. It also opposes a shift to Charles de Gaulle, which is in Roissy, a town north of the city.

Any move to restrict non-Air France long-haul flights from Orly will face strong opposition from the excluded carriers including BA. A spokesman for the airline said: "Such proposals would distort competition and the real loser would be the flying public." A BA insider said that as BA and AA have yet to secure regulatory approval for their alliance, "any talk to build a hub in Orly is ridiculous" . BA was allowed to fly to Orly only after a lengthy battle and European Commission intervention on its behalf back in 1994.