Britain's Office of Fair Trading (OFT) has advised the government that the proposed British Airways and American Airlines (AA) alliance should meet conditions set out by the European Commission or face a referral to Britain's Monopolies and Mergers Commission (MMC).

The British government said yesterday it had received the OFT's advice. The OFT recommendation will be published and open to industry consultation until September 4th, after which the government will decide whether to clear the deal.