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TIME: Almanac 1993
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TIME Almanac 1993.iso
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080392
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08039913.000
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1993-04-08
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THE WEEK, Page 25BUSINESSOne If by Land, Two If by Sea . . .
A chunk of USAir gives British Air a foothold in the American
market
The encounter this time was far friendlier than at Lexington
and Concord. In one of the biggest cross-border deals to date,
British Airways agreed to acquire a 44% equity stake in USAir
for $750 million. If approved, the transaction will result in
the largest airline alliance ever and could accelerate
worldwide consolidation of the industry. The most immediate
impact, though, will be to rescue the Arlington, Va., carrier
from a cloudy financial future. After expanding rapidly in the
late 1980s, USAir was blown off course by the economic recession
and a slowdown in air travel. It has lost more than $800 million
since 1989, including $149 million so far this year.
The main winner will be British Airways, now the world's
biggest international carrier. The transaction fulfills its
long-held desire to enter the American market, fly into more
U.S. cities and pick up more American travelers for its
transatlantic flights. Although foreign ownership of American
airlines is limited to a 49% stake and 25% of voting stock,
European and Asian carriers have rushed to make deals. KLM Royal
Dutch bought 20% of Northwest in 1989, and in 1988 Pan Pacific
Hoteliers Inc., a subsidiary of Japan Airlines, took a 20%
position in Hawaiian Airlines.