Mid-Atlantic Dogfigh

THE ``special relationship'' between the United States and Britain is strong in the Gulf, but the two nations are engaged in a spat over North Atlantic air travel. The dispute doesn't threaten US-British solidarity on larger issues; but Washington and Westminster should mind that they don't squander good will in a dogfight above the Atlantic. The complicated issues involve the survival of two US air carriers, competition in North Atlantic air travel, US landing rights at London's Heathrow Airport, British penetration of US air markets, and British control of US airlines.

The threatened US air carriers are TWA and, in even worse shape, Pan Am. To stave off financial collapse, they have agreed to sell their North Atlantic routes, including landing rights at Heathrow, to American Airlines and United Airlines, respectively.

But the British government, which must approve the route transfers, is concerned that American and United will pose a stiff competitive challenge to British Airways; London also sees Pan Am's and TWA's distress as an opportunity to exact greater air-travel concessions from the US than are currently provided in the bilateral agreement between the two countries.

British Airways' goals include the right to fly between certain US cities (necessary, it says, to offset United's and American's strong ``feeder'' networks), and to fly directly from European cities to the US, without landing in Britain. British investors - whose capital US air carriers can well use - want the right to acquire controlling interests in US airlines, a change from current law that would require legislation.

It's not clear that equity rests with one country more than the other. Each government is seeking to protect its own airlines' interests; thus neither is pursuing a truly free-market, open-skies policy. It would be unfortunate if, in its hardball negotiating, Britain allowed Pan Am or TWA to expire. But the US may have to pay a price to give its enfeebled carriers a chance to survive.

What is clear is that commercial disputes between nations can turn nasty. In a way, it's regrettable that the two governments have been pulled into the fray. But it also may be that government officials can apply a larger perspective in settling the dispute than can airline executives.

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