From MURRAY RITCHIE
European Editor
Brussels
MR John MacGregor, the Transport Secretary, last night led a British
assault on Belgian-inspired moves to bail out stricken European airlines
with state and EC subsidies.
Several European airlines are now in desperate trouble including Air
France, Aer Lingus, and Sabena of Belgium, and have joined a lobby for
government help.
At an informal meeting of Community Transport Ministers in Brussels,
Mr MacGregor responded to a Belgian Government suggestion -- reputedly
scripted by Sabena -- that EC funding be provided for a radical
restructuring of the entire community civil aviation industry.
Talk of such moves has produced sharp disapproval in the UK where the
Government boasts that British Airways resolved its financial problems
and returned to profitability through privatisation.
Some EC states say the British are exceptional because their airlines
benefit greatly from Heathrow and protected access to the lucrative
North Atlantic routes.
Mr MacGregor found allies in some, mainly charter, airlines who
complained that state subsidies for major national carriers would be
unfair and would merely increase capacity which is already surplus and
costly.
''I was quite pleasantly surprised at their attitude,'' the Minister
said. Mr MacGregor said the transport council would take note of the
industry's wishes and frame its policy accordingly.
Ministers will also study a major policy document expected from the EC
Commission which is studying aviation and its difficulties since the air
transport industry was liberalised.
Sabena is now losing money heavily and Air France has just announced a
huge redundancy programme. Aer Lingus, which is losing #1m a week, is
said to be all but bankrupt.
These and some other state airlines need government subsidies to
remain operating and the British do not oppose a temporary lifeline. But
Ministers oppose a return to large scale state aids, which would
increase over-capacity and defeat moves to increase competition and
reduce the cost of air travel within the Community.
Mr MacGregor said airlines were concerned at the ever-increasing cost
of regulations. While Britain accepted the need for costly safety and
environmental regulations, he said, there was room for reviewing other
areas where regulations, including social provisions, were sometimes
unnecessary.
''This is something we need to watch very carefully.'' he said.
The Minister was backed by a European Parliament study which came down
against the principle of state aids and condemned them as
anti-competitive.
Mr MacGregor quoted a British Airways policy document stating that it
was possible for airlines to do what BA had done and transform
themselves without state aids.
Mr Brian Cowen, the Irish Transport Minister, told the meeting that in
the long term there had to be some support for restructuring the
European air transport industry from member states and from the EC. The
Irish are currently awaiting EC Commission approval for an aid package
to Aer Lingus of #175m.
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