Companies: BAY   

Willie Walsh, mercurial boss of FTSE 100 giant British Airways, says BA would look at running flights across American skies should the US fully liberalise its aviation industry from 2010.

‘There may be some of the US domestic market that we find interesting,’ chief executive Walsh was reported as saying. Serving the West Coast from New York is apparently an option for BA, though the group has no plans to break into significant US domestic operations.

Walsh’s musings followed European Union approval of a landmark aviation pact with the US that will throw open transatlantic air travel to more competition and drive down fares.
Under the ‘open skies’ deal (which takes effect next March), EU airlines will be able to fly from any city in the 27-nation bloc to any US city and vice versa, replacing highly restrictive bilateral arrangements that date back to the Second World War.

EU Transport Commissioner Jacques Barrot forecast that the agreement, which he expects to trigger takeovers among European airlines, would boost transatlantic flights by 50 per cent over five years. European member states would be able to withdraw benefits of the agreement from US airlines if Washington doesn’t agree by 2010 to allow foreign airlines to buy control of US carriers, said Barrot. Shares in European airlines, including BA, gained altitude on the news, despite concerns the open skies pact could expose it to greater competition and margin pressure.