U.S., British Landing Rights Talks Break Off

Talks between the United States and Britain over whether landing rights at London’s Heathrow Airport can be transferred from one airline to another broke off Wednesday without resolution--jeopardizing deals key to two struggling U.S. carriers.

The outcome affects both the sale of Pan American World Airways’ London routes to United Airlines and Trans World Airlines’ plan to sell routes between the United States and London to American Airlines.

Under the so-called Bermuda agreement landing rights at Heathrow are not transferable. Thus, unless the two countries can come to terms, American and United would have to land at the less popular Gatwick Airport outside of London. Both carriers said they will not purchase the routes if they cannot land at Heathrow. Heathrow, while much more convenient to both the city and other European flights, is very congested. As a result, no new airlines are allowed to land there.

The talks are crucial to Pan Am and TWA. Both say they need the cash from the sales to keep flying. Pan Am is already in Chapter 11 bankruptcy proceedings. It has borrowed $170 million against the United sale. TWA hinted Tuesday that if its deal with American is not quickly completed, it might suffer Pan Am’s plight. Pan Am sold the routes to United for $290 million. TWA sold its Chicago-London route to American for $110 million. These two deals have been tentatively approved by the Transportation Department. The sale of TWA’s other routes to London is still awaiting approval.

A major point stalling the negotiations between the United States and British transportation officials was a British push for additional landing rights for its carriers in U.S. cities.

“We had two days of talks scheduled,” said Hal Paris, a Transportation Department spokesman. “There was little progress and the American negotiators left.” Several sessions had been held both in London and Washington. Paris said no further talks had been scheduled.

Joe Hopkins, a spokesman for United, and Pam Hanlon, a spokeswoman for Pan Am, said that, while disappointed, their carriers did not expect an agreement at this session. But they said that final approval was expected.

Mark Buckstein, general counsel of TWA, declined comment.

“We don’t see anything unusual in the fact that the talks broke off,” said Lise Olson, an spokeswoman for American Airlines. “We think it is procedural.”