However these conditions were rather hard according to BA, which partly contributed to the collapse of the proposals at the end of 1999 . .
The international merger's prohibition is not only due to the rationale of competition policy but also because individual nation generally requires airlines based within their borders to be majority owned and controlled by their citizens. Airlines are therefore using alliance - covering a broad range of activities but stopping short a full-fledged mergers, as a way to get around there regulatory limitations. After the failure of the merger between BA and AA in September 1998, AA, BA, Canadian Airlines, Cathay Pacific Airways and Kantar Airways announced anew the Oneworld global alliance. From early 1999, the 5 airlines have offered a range of cooperative measures designed to provide a seamless world network . .
The Commission has also monitored state aid given to airlines. Article 92 -94 are aimed at restricting the use of state aids to firms and industries through government grant, low interest loans or tax concession.
The European Commission at first, refused to authorise general government handouts for failing flag carriers, which suffered direct losses as a result of the 11/9 attack. Yet under enormous pressures from the state members, it at last on 18/10 had to announce to ease state aid rules to allow the government to compensate airlines for flights which had to be cancelled in the wake of the atrocities. As a result BA is eligible for millions of pounds in Government compensation for the loss they have suffered which they have claimed to be £48million .
The Commission has also relaxed its use it or lose it' rule under which airlines which fail to fill a slot for 80% of time, relinquish rights to it due to exceptional circumstances created by the event . This means that BA and other airlines can have some breathing space to see if after the impact of ordinary events and ultimately by next summer whether they will be able to reintroduce these services.