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USAir fights to keep tie with British Airways


WASHINGTON -- USAir Chairman Seth E. Schofield charged yesterday that the U.S. government is holding USAir hostage, using its alliance with British Airways as a bargaining chip in the ,, on-again, off-again bilateral talks with the United Kingdom.

In three weeks, the U.S. Department of Transportation is expected to decide whether USAir and British Airways should be allowed to continue linking flights, under a process known as "code-sharing."

Code-sharing allows passengers traveling on both airlines to buy one ticket and have their bags transferred automatically just as if they were flying one airline.

When Transportation Secretary Federico Pena granted the original approval for the alliance last March, he limited the code-sharing process to one year -- even though it is explicitly allowed under the aviation treaty between the two countries and used by other airlines with international partners.

Nevertheless, Mr. Pena warned that the partners might not get an extension for code-sharing if the United Kingdom failed to give other U.S. carriers more landing times at London's Heathrow Airport, the gateway to Europe. His decision on the code-sharing renewal is expected by March 17.

During the past year, bilateral talks between the two countries focused on more access to Heathrow in exchange for greater foreign ownership of U.S. airlines. British Airways, which last year invested $400 million in the financially struggling USAir, plans to invest another $350 million over the next four years if it is permitted to obtain more control.

The negotiations between the two countries broke off in early December, however, and no sessions are scheduled. Mr. Pena is threatening to end the code-sharing for British Airways and USAir if the talks don't move forth. "Our own government is holding us hostage by using it as a bargaining chip in trade negotiations with the United Kingdom," Mr. Schofield said during a luncheon with transportation writers at the National Press Club here.

Mr. Schofield said the alliance is "a business transaction between two private corporations. . . . Please step aside and let us get on with our business," he said.

USAir is now linking codes with British Airways on domestic flights from 32 different cities to London.

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