BRITISH AIRWAYS <BAB> SEES SMOOTH TRANSITION
British Airways is looking forward to
industry deregulation in Europe and believes it will be a
smoother transition than the turmoil that followed the opening
of the U.S. skies, its chief executive said.
    Colin Marshall told Reuters that Europe will phase in
deregulation gradually to avoid the problems created in the
U.S. in the late 1970s -- fast growth, unstable fares, new
carriers that went bankrupt and ultimately years of losses for
even the largest airlines.
    "In Europe we have the benefit of learning from the
American experience," Marshall said. "When you add that to the
conservative nature of the Europeans, it amounts to an approach
that is slower and more cautious."
    Airline liberalization, as it is called, must first be
approved by the transportation ministers of the European
Community nations. This could come this month when the
ministers meet to take it up, Marshall said in an interview
during a U.S. visit to talk to airline industry analysts.
    "As the largest airline in Europe, and with the
sophisticated computer systems we have to help us with yield
and load factors management, I think we have a very good
chance, if not the best chance, of doing well in a liberalized
situation in Europe," Marshall said.
    Airline market deregulation in Europe will open up new
routes between European countries, allow established carriers
to grow and permit new airlines to begin operations.
    It will also free airlines to fly more seats on any given
route -- something that is highly regulated now -- and to base
fares on market forces. Discount fares in Europe might even
become more widespread.
    "We think liberalization will help stimulate traffic,"
Marshall said.
    Lower fares have been offered by British carriers since
domestic services in Britain were deregulated in 1984, he said.
But passengers taking return flights or from other countries
pay higher, regulated prices.
    Marshall said deregulation will spawn more European
airlines, possibly to be followed by a spate of mergers, as is
happening in the United States.
    Two airlines, Sabena and Scandinavian Airlines System
(SAS), are now discussing a merger. Their success "might open
up Europe to further merger activity," he said.
    This is because an SAS-Sabena merger could be a test case
to determine whether countries are willing to allow landing
rights to be transferred from one carrier to another, he said.
 Reuter
