LONDON, Sept 23 (Reuters) - European discount airline easyJet Plc (EZJ) objected to a British Airways-Swiss International Air Lines tie-up announced on Tuesday, saying it would probably demand from the authorities that the new alliance give up some of their lucrative take-off and landing slots at London Heathrow to
maintain competition there.
British Airways (BAY) and Swiss (SWIn) reached an agreement on Tuesday to operate joint flights between London and Switzerland. But the deal also effectively involves BA giving the loss-making Swiss International a 50 million Swiss francs ($37 million) credit facility in return for eight pairs of daily runway slots at London's Heathrow Airport.
Swiss has a total of 14 daily pairs of slots at Heathrow.
"We would take a very dim view if this led to a reduction in competition between London and Zurich," said Toby Nicol, the spokesman for easyJet, Europe's biggest budget airline, which flies to Zurich and Geneva from London Luton and Gatwick.
"We have no desire to go into Heathrow but other airlines might and given that it's impossible to get into Heathrow, we would probably demand this alliance give up slots at Heathrow."
BA dismissed easyJet's concerns.
"We say the routes between Switzerland and the UK are already highly competed. We don't believe there should be any significant competition issues," a BA spokeswoman told Reuters.
Chief Executive Rod Eddington told reporters later the market share of a combined BA-Swiss on routes between London and Switzerland was comfortably above 50 percent but BA was ready to discuss any competition remedies proposed by authorities.
"Clearly we've got to go to Brussels and make the case in an appropriate and sensible way," Eddington said.
Asked if the market share was more like 60 and 70 percent, Eddington said: "That's what we're speculating it is here."
The European Commission said earlier it was likely to look favourably on the deal. "We have always found a way to approve these alliances, overcoming issues of competition that have been identified," Commission spokeswoman Amelia Torres said.
The question of whether airlines have the right to trade slots at Heathrow, the world's busiest international airport, has caused problems in the past for BA in its abortive attempts to forge closer links with transatlantic partner American Airlines (AMR).
Commerzbank analyst Dominic Edridge said the key issue was the reception the BA-Swiss agreement, which includes codesharing, received from the European Commission.
"At the end of the day I think it is a pretty reasonable move and BA at the end of the day don't have any direct financial exposure to Swiss," Edridge told Reuters. "But the big question is about competition."
Attempts by BA and American to cut costs by virtually merging their transatlantic businesses have been blocked several times in the past as competition authorities have demanded the airlines give up valuable Heathrow slots in return for any regulatory blessing.
But Edridge said the competition authorities may examine the BA-Swiss tie-up in the light of total competition across all London airports on the Zurich and Geneva routes instead of just focusing on Heathrow.