BAA Agrees UK Tax Exemptions - Report

Spanish construction and services group Ferrovial has agreed a tax break on capital gains by its British airports unit BAA that could be worth hundreds of millions of pounds, Expansion reported, citing unnamed sources.

After a year of negotiations with Britain's Inland Revenue, Ferrovial has secured exemptions on capital gains from asset sales in 2008 as well as additional planned disposals, such as London's Gatwick Airport, the newspaper said.

The Spanish company is considering indicative offers for Gatwick after it was told by Britain's antitrust regulator to sell the airport as well as London's Stansted because of competition concerns.

Ferrovial will be allowed to keep Heathrow, one of the world's busiest airports, with 65 million passengers a year.

Last month, Heathrow was controversially awarded government approval for a third runway for an estimated GBP9 billion pound (USD$12.74 billion) investment.

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US Airlines Fight FAA Crew Rest Requirements

Seven US airlines have sued the Federal Aviation Administration, claiming the agency broke its own rules and may have compromised flight safety when it set new standards for pilot rest times last year without input from the carriers.

The airlines, including American Airlines, Continental Airlines and United Airlines, filed the lawsuit on December 24 in the the US Court of Appeals for the District of Columbia Circuit.

The airlines said in the complaint that they should have had a chance to comment on the rules, which would place yet another financial burden on them.

"FAA has neither demonstrated how the rule will advance safety, considered the potential that the rule may actually diminish safety, nor justified the significant costs of the rule against any purported benefit," the carriers said.

Delta Air Lines, which recently merged with Northwest Airlines, was not a party to the lawsuit. Both Delta and Northwest have negotiated separate rules with the FAA governing crew rest requirements on long-haul flights.

The FAA did not comment on the lawsuit on Monday.

The government rules require additional rest time and longer time between flights for pilots on nonstop flights that last more than 16 hours. To comply, airlines would have to put more pilots on those flights and provide more in-flight rest facilities for them.

These changes would drive up costs for airlines, which hope to claw their way out of a financial downturn in 2009.

The vast majority of international flights are shorter than 16 hours, but weather delays can unexpectedly lengthen trips and pilots' workdays.

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