Saw this in the Financial Times. Interesting how the government there is stepping in to save a failing carrier.
Italy orders airlines to curb fare deals
By Kevin Done in London
Published: August 8 2004 21:08 | Last updated: August 8 2004 21:08
Italy has ordered leading European airlines, including British Airways and Germany's Lufthansa, to stop offering lower fares than Alitalia, the struggling majority state-owned Italian flag carrier, on competing long-haul services.
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The move by the Italian government comes as it seeks to prevent Alitalia collapsing into bankruptcy by agreeing an emergency state-guaranteed €400m ($493m) loan to the airline.
But it has sparked a fierce protest by BA to the European Commission and has triggered a row with the UK government.
The UK transport department said the Italian government had been told “in strong terms” that BA should be allowed to continue with its fare offers.
Lufthansa said it was in talks with Italian authorities after it had been told to raise its fares to Alitalia's levels.
Enac, the Italian Civil Aviation Authority, was not available for comment.
BA said it had written to the Commission urging it “to intervene promptly” to require the Italian authorities to suspend their actions until the legality of the measures could be investigated.
BA said similar potential problems over the setting of prices on some indirect long-haul services connecting through its London Heathrow hub could occur in several European Union states including Germany, Poland, Latvia, Hungary and the Czech Republic.
BA told the Commission last week that Enac had threatened to take legal action unless the airline “withdraws its fares henceforth”.
In a letter received on July 29, BA had been given three days to comply or face immediate consequences.
Additional reporting by Tony Barber in Rome.
Italy orders airlines to curb fare deals
By Kevin Done in London
Published: August 8 2004 21:08 | Last updated: August 8 2004 21:08
//
The move by the Italian government comes as it seeks to prevent Alitalia collapsing into bankruptcy by agreeing an emergency state-guaranteed €400m ($493m) loan to the airline.
But it has sparked a fierce protest by BA to the European Commission and has triggered a row with the UK government.
The UK transport department said the Italian government had been told “in strong terms” that BA should be allowed to continue with its fare offers.
Lufthansa said it was in talks with Italian authorities after it had been told to raise its fares to Alitalia's levels.
Enac, the Italian Civil Aviation Authority, was not available for comment.
BA said it had written to the Commission urging it “to intervene promptly” to require the Italian authorities to suspend their actions until the legality of the measures could be investigated.
BA said similar potential problems over the setting of prices on some indirect long-haul services connecting through its London Heathrow hub could occur in several European Union states including Germany, Poland, Latvia, Hungary and the Czech Republic.
BA told the Commission last week that Enac had threatened to take legal action unless the airline “withdraws its fares henceforth”.
In a letter received on July 29, BA had been given three days to comply or face immediate consequences.
Additional reporting by Tony Barber in Rome.
