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Subject: Clinton Says He Opposes USAir Deal; Candidate Would Kill British Airways
Date: Fri, 30 Oct 92 04:28:31 EST
Message-ID: <57.1992Oct30.042831@AmeriCast.com>

Clinton Says He Opposes USAir Deal; Candidate Would Kill British
Airways Pact<By Martha M. Hamilton=Washington Post Staff Writer=

Democratic presidential contender Bill Clinton has joined in-
dependent candidate  Ross Perot in making a campaign issue out of
the proposed alliance between USAir Group Inc. and British Air-
ways PLC.

 Clinton said on the "Larry King Live" show Wednesday night that
if he were president he would refuse to sign off on the proposed
$750 million deal because, "we get no access to the British mark-
et if we do it."

 Yesterday, however, Transportation Secretary Andrew H.  Card
said that he planned to decide on the alliance sometime between
the election and Dec. 24, the date either of the two airlines
could walk away from the deal.

 The issue is expected to come up again today when the Arkansas
governor visits Pittsburgh, USAir's largest base of operations,
for a midday rally.

 The proposed deal between British Airways and the sixth-largest
U.S.  carrier would link USAir's schedule to the schedule of
British Airways to help increase traffic on British Airways tran-
satlantic flights. In return, British Airways would invest $750
million in USAir, which has suffered hundreds of millions in
losses. The deal requires approval by regulators on both sides of
the Atlantic, as well as  stockholders.

 American Airlines Inc., United Airlines Inc. and Delta Air Lines
Inc. have opposed the deal, saying that it would put other U.S.
carriers at a competitive disadvantage, since their access to
Britain and beyond is more limited than British Airways'.

 Perot first raised the issue during the last presidential de-
bate, prompting an immediate response by Seth E. Schofield,
chairman of Arlington-based USAir.  Yesterday, Schofield fired
off a similar letter to Clinton, taking issue with the Democrat's
views.

 "The USAir-British Airways alliance will preserve jobs in the
U.S. airline industry while it increases domestic competition,
keeps fares low and increases pressure for strong customer ser-
vice," Schofield wrote.

 One issue Clinton has raised is the inequality in competition
between European aircraft manufacturing consortium Airbus Indus-
trie, which receives government subsidies, and U.S. aircraft
manufacturers. Schofield pointed out - as he had in his letter to
Perot - that USAir and British Airways operate large numbers of
U.S.-built Boeing Co. aircraft.

 Clinton hasn't precluded allowing such a deal if an agreement is
reached that would give U.S. carriers broader rights abroad, said
a member of his campaign staff.  The point of view that Clinton
brings to the issue is one that is emerging in his discussions of
many trade issues - that of reciprocity.

 "For Clinton, free trade is only good in conjunction with poli-
cies that promote worker retraining and other economic aims,"
said  Gary C. Hufbauer of the Institute for International Econom-
ics, a Washington-based research group. "Free trade is all-
important for (President) Bush and he lets other economic poli-
cies stand or fall on their merits."

 U.S. and British negotiators ended another round of talks yes-
terday on proposed changes to the bilateral agreement governing
aviation between the two countries, which might provide more U.S.
airlines greater access to British markets. The talks are
scheduled to resume in Washington Nov. 9. However, the Bush ad-
ministration has said its decision on the USAir deal doesn't
depend on the outcome of those talks.

 One of the Clinton campaign's many policy study groups is an in-
formal Transportation Task Force, headed by former Civil Aeronau-
tics Board attorney William K. Ris Jr.  Ris is a senior vice
president of a lobbying firm that has been retained by American
Airlines, but a Clinton campaign staff said Clinton is soliciting
advice from a large number of sources and that Ris has had no
direct contact with Clinton on the USAir-British Airways
issue.<Staff writer Peter Behr contributed to this report.>02:38
10-30C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

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