BA/B.CAL MERGER (Hansard, 13 April 1988)

§ The Secretary of State for Trade and Industry (Lord Young of Graffham

Yes, my Lords. The Commission announced on 8th March that, as a result of undertakings given by BA, it intended to close its investigations into the merger of British Airways and British Caledonian. The Government understand that these undertakings (which are in addition to the proposals BA put to the Monopolies and Mergers Commission) are as follows:

1. BA will not appeal against the CAA's decision on applications for British Caledonian's domestic routes.
2. BA will withdraw its application for Hamburg, Stuttgart, Rome and not reapply for a service commencing earlier than 1st April 1991.
3. BA will not appeal against the CAA's decisions on Paris, Brussels and Nice.
4. In regard to Milan, BA will accept that priority is given to enable a new service to operate twice daily frequencies and will not contest a decision by the UK regulatory authorities to allocate capacity under the Italian/UK bilateral air services agreement provided that BA would not as a result have to reduce its own capacity.
5. BA will withdraw British Caledonian's objection to the Air Europe appeal against the CAA's refusal to grant it a licence to Rome.
6. BA will not oppose any application to the CAA by another airline for a licence to operate in competition with BA on any route within the European Community where BA's capacity would not be constrained.
7. BA has agreed to place a ceiling of 25 per cent. on the total slots available to the merged airline at Gatwick. This would be applicable for four years from 1989.
8. BA will not transfer any of British Caledonian's services from Gatwick to Heathrow in a way that would be detrimental to the interests of consumers or competition.
9. BA will report to the Commission twice a year until 1992 on implementation of these undertakings.

The company may seek a relaxation of these undertakings in the light of unforeseen circumstances.