Whose Airlines Are They, Anyway?

NO OTHER MAJOR U.S. AIRLINE HAS SUCCESSFULLY emerged from bankruptcy proceedings. But thanks to Air Canada, battered and bruised Continental is about to do the unthinkable -- complete a bankruptcy restructuring for the second time in 10 years. The two carriers have struck a deal that will give Air Canada part ownership and access to Continental's American routes, in exchange for a much needed $450 million infusion of cash.

The deal is the latest in a flurry of international partnerships being formed as the world's airlines shoot it out for passengers. By far the most controversial is USAir's plan to sell a 44% stake to British Airways for $750 million. The transatlantic combo would rank as one of the three biggest airlines in the world, linking 339 destinations in 71 countries. Most alarming to U.S. carriers, the arrangement would give British Airways, one of the world's strongest carriers, unlimited access to American markets. President- elect Bill Clinton and Ross Perot joined the chorus of alarm during the campaign. Said American Airlines chairman Robert Crandall: "What will happen is, the good jobs will go to London and the baggage handlers will stay here." (See related story on page 38.)