BRITISH
Airways has hit out at US carriers seeking more government handouts to rescue
them from further financial difficulties following September 11.
The
attack came as United Airlines threatened to file for bankruptcy protection
last week after a lukewarm response to its plea for a $1.8 billion loan
guarantee. US Airways has also appealed for government help after filing for
bankruptcy protection last week.
BA
said loans granted to airlines by the Bush administration in the wake of
September 11 had already created unfair competition and disadvantaged European
airlines, which are barred from state aid. A BA spokesman said: “Indirectly
over the past year the money has been used to subsidise the airlines and there
is a feeling in Europe this has created unfair competition. US carriers have
been doing some heavy fare cutting, especially to popular business routes like
Frankfurt. In principle, we are against government aid of this kind.”
United
chairman and chief executive Jack Creighton warned the carrier could file for
Chapter 11 bankruptcy protection in the next month. The carrier is facing
immediate debt repayments of $875 million and revenues or demand haven’t
returned to the extent expected.
Creighton
said: “Unless we lower our costs dramatically, filing for bankruptcy protection
will be the only way we can ensure the company’s future and continued operation
of the airline.”
The
move was widely seen as an attempt to force the hand of the government, which
would be embarrassed by the country’s second largest carrier sliding into
bankruptcy.
United’s announcement came as American Airlines
revealed plans to axe 7,000 jobs and cut winter capacity by 9%.