EC SHELVES LEGAL ACTION AGAINST THREE AIRLINES
The European Community Commission said
today it has shelved threatened legal action against West
Germany's Lufthansa <LHAG.F>, Alitalia of Italy <AERI.MI> and
Olympic Airways of Greece after they agreed to change practices
that restrict competition in the heavily-protected EC sector.
    The Commission had also written to seven other Community
airlines, including British Airways <BAB.L> and Air France,
last summer warning them that agreements such as capacity and
revenue sharing accords broke EC competition rules. The seven
have already agreed to hold talks with the Commission on
bringing such practices into line with the rules.
    In a statement, the EC's executive authority also spelled
out tough demands it will be putting to carriers in talks on
liberalising EC air transport and bringing down airfares,
warning that new legal moves were possible if they refused to
comply.
    As a first step, the Commission wanted the 10 carriers to
eliminate the most serious distortions of competition caused by
the current practices and agreements.
    The latest demands go further towards liberalisation than
proposals that are currently the subject of difficult
negotiations between by EC Transport Ministers. REUTER
