BRITISH AIRWAYS boss Willie Walsh has vowed the airline will not surrender runway slots at Heathrow in order to land its proposed alliance with American Airlines.

Competition regulators are tipped to demand that the two carriers give up as many as 10 pairs of the highly-prized slots a day. But Walsh told The Sunday Times: “I won’t.”

His defiance was backed by Gerard Arpey, chief executive of American. “There is no rational basis for us to give up slots,” he said.

Analysts believe the alliance, which would see the airlines combine transatlantic operations as a joint venture, could add up to £250m a year to BA’s bottom line within three years - a significant amount, given BA is on course to only break even this year due to high oil prices and drooping demand.

The airlines will save money by cutting staff and using aircraft more efficiently, and generate more revenue from their powerful combined network and frequent-flyer programme.

Walsh would not be drawn on the likely benefits, but said BA had already drawn up its own internal targets. He said he was hopeful of the joint venture being ready by October next year, the start of the airline industry’s winter season.

The start date will be determined by when - and if - regulators approve the deal. Lobbyists in Washington think it is unlikely to be approved by the outgoing Bush administration, meaning a final decision may not be likely until May next year at the earliest. Arpey, however, said he was hopeful that the Bush administration would deal with the application.

Analysts and rival airline executives think it likely regulators will demand the pair give up some slots at Heathrow, where they have changed hands for £20m a pair.

Andrew Lobbenberg, airline analyst at Royal Bank of Scotland, suggested in a recent report that six to eight pairs would have to be given up, four of which would come from BA.

Walsh was defiant. “There should be no slot remedy. I don’t see how it could be justified.” It is understood the agreement signed last week contains a break fee should either side walk away from the deal before it is appraised by regulators.

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