BusinessWeek: January 11, 1993

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KEEP THOSE OPEN-SKY SIGNALS LOUD AND CLEAR

Don't shed any tears over the collapse of British Airways' attempted rescue of troubled USAir Inc. The deal was scuppered by the inability of John Major's government to marshal enough political support for an Anglo-American open-skies treaty, which Washington had rightly made a precondition for approval of a $750 million BA infusion into USAir. But in an increasingly internationalized industry, improved access to 40% of all the world's airline passengers makes so much sense for the Brits that the deal could well be back again. Even more important is the message the hard-nosed Washington position sent London and other capitals about U.S. determination to obtain equal opportunities in foreign markets.

BUSINESS WEEK has long argued that reciprocity of access must be the key to approval of investments in U.S. airlines by foreign carriers. America's hard line is even more important now that other European states, including France and Germany, and Japan are talking about abrogating or fudging existing bilateral treaties. The message must be unequivocal: Access must be as level as an airport runway.

At such a point in the evolution of the global airline industry, it is disheartening to learn that former Denver Mayor and soon-to-be Transportation Secretary Federico Pe a is an admirer of a law professor known to the airlines as "Mr. Rereg." Of course it may not be true, as is said on the Hill, that Pe a and Paul S. Dempsey of the University of Denver agree Dempsey would make a splendid assistant secretary for policy and international affairs. We hope not. Add up the benefits, and the U.S. consumer has done pretty well out of deregulation. We should jawbone Europeans into deregulating, not trying to breathe life into a discredited policy.
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