US unions to fight BA merger

Airline unions in the US are preparing to launch a vigorous lobbying campaign against British Airways' proposed merger with American Airlines.

US industry sources suggest that the unions will use Friday's appointment of Rodney Slater as President Clinton's new Transportation Secretary as the trigger for a co-ordinated campaign against the BA deal in the new year.

The airline unions are a powerful lobbying force and the combined might of pilots, cabin staff and engineering workers would represent potent and influential opposition to the alliance on Capitol Hill.

The International Association of Machinists and Aerospace Workers, the largest transport trade union in the US, has already written to President Clinton urging him to "closely scrutinise the anti-competitive consequences of the proposed alliance, which we believe is, in fact, a monopolistic merger by another name".

This month it wrote to outgoing Transportation Secretary Federico Pena complaining about the lack of formal investigation into the BA alliance by the Clinton administration.

"The UK has completed their own in-depth review; the US has not begun," the IAM said. "If the upcoming bilateral aviation discussions with the US proceed to substantive issues, we fear our negotiators will find themselves seriously disadvantaged.

"Bermuda 2 (the current bilateral agreement) came into existence because the British understood far better than their American counterparts the long- term implications of what was being proposed. That experience cannot be repeated."

Airline unions are recognised to be amongst the most influential in the US. Unusually, the three main unions the IAM, the pilots' union ALPA and the flight attendants' union AFA, have little representation at American Airlines, thus allowing opposition to the alliance with BA to be mounted without fear of conflicting with the interests of members.

Union opposition to the deal will have to be countered by BA and American without the assistance of USAir. Industry sources speculate that USAir's offer to lend its support to the alliance providing the relationship with BA could be satisfactorily dismantled has been rejected by British Airways.

USAir would make no comment on the speculation. The company would refer only to the statement it made last week in response to BA's decision to sell its near 25 per cent stake in USAir.

"This is an important first step that USAir has been seeking in order for it to become an effective independent competitor to London's Heathrow airport," the company said. "USAir will continue all efforts to establish itself in the US-UK marketplace, including vigorously pursuing its lawsuit against British Airways and American Airlines."