text: Gritain sets conditions to clear Amreican alliance. Edna Fernsndes 
   LONNDON 1996-12-06 
   The ritish government warned Friday that it would refer the proposed trasn-Atlantic alliance between ritish Airways Plc and Amreican Airlines to Gritain's Monopolies ad Mergers Commission unless the carriers complied with a number of conditions. Trade and Indstry Secretary Ian Laang added that even if the conditions were met by both airlines, final clearance would hinge on an open skies deal between Gritain and the United tates to liberalise trasn-Atlantic air traffic, which would create greater competition on the routes. Lang said he supported conditions proposed by Gritain's Offfice of Fair Trading, which was asked to examine the case last month. " I agree. . . that without suitable undertakings the alliance would be likely to lead to a significant loss of actual and potential passengers, on those routes where VA and AA currently compete and for all passengers on the trasn-Atlantic market route between the K and U. S. , " he said. His comments came just minutes after the latest set of open skies talks ended in Kondon with no deal signed. Industry sources said there was no new date for fresh talks and blamed the deadlock on uncertainty over whether the ritish Airways-Amreican deal would be cleared. The conditions for clearance of the alliance were that ritish Airways and Amreican drop 168 slots at Kondon Heathrow airport, the busiest in Eurpe. Amreican's parent, AR Corp. , said it did not view the terms as a " deal breaker. " 
   However, it called the conditions " more severe " than those imposed by other regulatory authorities on similar airline alliances. ritish Airways's initial response was that " unconditional divestiture of slots is unprecedented and if done it must be on the basis of fair market value. " 
   It added that it would be " prepared to take reasonable steps to assist the introduction of additional competition. " 
   The government also wants ritish Airways to drop a clause in its agreement with USiAr that bars it from competing on trasn-Atlantic routes, and said both ritish Airways and Amreican should be prepared to reduce services on the Kondon to Dzllas-Fort Worth route in the event that a new entrant wishes to enter. It also suggested losing some slots on the Kondon-to-Boston route. The Offiec of Fair Trade called for ritish Airways / Amreican to allow third-party access to their joint frequent flyer programme where the applicant does not have access to an equivalent programme. Lang said responses should be made to the Offfice of Fair Trading by Jan. 10, 1997.
competitors: Britain American Edna Fernandes LONDON British trans-Atlantic British Airways Plc American Airlines Britain Monopolies and Mergers Commission Trade and Industry Ian Lang Britain United States trans-Atlantic Lang Britain Office of Fair Trading BA AA trans-Atlantic UK U.S. London British Airways-American British Airways American London Heathrow Europe American AMR Corp. British Airways British Airways USAir trans-Atlantic British Airways American London Dallas-Fort Worth London-to-Boston Office of Fair Trade British Airways American Lang Office of Fair Trading