4 June 1998

Rivals say passengers will pay dear for deal

Julia Finch reports on fury over airline's involvement in London-Paris rail service

British Airways' rivals last night reacted furiously to the airline's involvement in the London-Paris rail link.

They accused BA of masterminding a cartel, said consumers would pay unjustified fares and demanded BA's role be investigated by competition watchdogs.

The UK's national flag carrier and its new Eurostar partner National Express are already dominant forces on the London-Paris route.

According to the Civil Aviation Authority, some 2.7 million people per year travel by air from Heathrow, Gatwick and Stansted to Paris.

The London-Paris air route is the biggest city-to-city route within the European Union and BA has 39 per cent of the air travel market with 19 flights a day.

National Express, meanwhile, through its Eurolines operation, is the leading road carrier operating between the two cities.

Stelios Haji-Ioannou, the chairman of low-cost air carrier Easyjet said BA's role was "like putting King Herod in charge of the kindergarten". He urged competition authorities to halt "this latest move against the consumer".

A spokesman for Virgin, which BA defeated in the battle to run Eurostar, said the deal that John Prescott had put together was "admirable", but there were "serious competition issues" over BA's involvement.

"British Airways and its partner National Express will now dominate 90 per cent of all the public transport between Paris and London. National Express controls the coaches, BA dominates the air routes and together they now both control the rail service. It will be in their interests to keep fares as astronomically high on the trains as they do on their planes.

"It is a cartel of monumental proportions, a charade and a disgrace."

Since Eurostar services started in 1994, the direct Waterloo-Gare du Nord link has stolen hundreds of thousands of air passengers. Some one-in-five capital-to-capital trips are taken on the 180 mph train.

Even discounting the arrival of Eurostar, BA still enjoys a dominant position on the London-Paris route, and claims 29 per cent of the combined air and rail market.

Eurostar, which BA will jointly operate with National Express and SNCF, the French rail group, speaks for a further 26 per cent. BA and Eurostar combined have 55 per cent of the market.

Last night BA insisted the airline did not expect any competition issues to arise because it was taking only a 10 per cent stake in the rail link and would exercise little influence.

4 June 1998

Rivals say passengers will pay dear for deal

Julia Finch reports on fury over airline's involvement in London-Paris rail service

British Airways' rivals last night reacted furiously to the airline's involvement in the London-Paris rail link.

They accused BA of masterminding a cartel, said consumers would pay unjustified fares and demanded BA's role be investigated by competition watchdogs.