British Airways shares plunged as much as 10 per cent yesterday, shaken by a pact between the US and Europe to boost transatlantic flights, which the European Union's transport chief has urged EU governments to endorse.
The "open skies" deal outlined last Friday would allow airlines to fly more routes linking Europe and the US, helping their businesses but potentially eating into revenues at BA and other carriers which dominate the routes.
Transport commissioner Jacques Barrot yesterday called the plan the most ambitious ever attempted and said failure by Europe to back it would create "a legal mess".
"In the next few weeks, I will ask the transport ministers from around Europe to look hard at this agreement," he said in a speech in London.
"I hope we can go ahead, but I am not ready to predict the outcome."
Britain, one of the countries that might oppose the plan, wants an "agreement that is meaningful, balanced and robust", a spokesman for the British department for transport said.
He would not be drawn on how Britain was likely to vote, but said: "EU transport ministers will need to examine the text. They will need to agree among themselves whether it represents an acceptable way forward."
Mr Barrot said that if EU ministers failed to back the deal, he would be forced to take nations to the European Court of Justice for refusing to give up bilateral aviation pacts with the US.
BA closed down 6.6 per cent at 496½ pence, its lowest finish in three months.
Analysts said BA had reason to be concerned. "The implication is that prices are going to fall, and everybody knows that BA's yields on the north Atlantic are what drives its profits," said Exane BNP Paribas analyst Nick van den Brul.
