EC NATIONS CLASH OVER PROPOSALS TO REVIVE LOSS-RIDDEN AIRLINES

EC NATIONS CLASH OVER PROPOSALS TO REVIVE LOSS-RIDDEN AIRLINES

The European Community remained deeply divided Tuesday over ways to revive its ailing airlines, with France seeking to slow down the pace of liberalization and Britain promoting increased competition and less government control.

Bernard Bosson, French transport minister, called for limits on passenger and freight capacity on some European routes and a freeze on air fares to give a respite to struggling airlines.But John MacGregor, Britain's secretary of transport, prescribed more competition, an end to state control and effective management to pull carriers out of the red.

EC transport ministers were equally split, with France supported by the southern member states, while Britain was backed by Denmark, Germany and the Netherlands.

The four liberal countries distanced themselves from a communique issued by the EC Belgian presidency floating an aid package to finance restructuring of troubled airlines.

Mr. Bosson clashed with Abel Matutes, EC transport commissioner, who stressed there could be no rollback of airline deregulation that will totally liberalize the EC market in 1997.

''The commission does not seem to listen to what member states say," said Mr. Bosson, adding that the EC's executive always equated legislation with protectionism. "This is very paradoxical and very dangerous."

British officials contrasted their country's profitable, privately owned airline industry with money-losing, state-owned carriers in the rest of Europe, particularly Air France, which has lost $1.3 billion so far this year.

Mr. Bosson is under pressure to cut costs at Air France after he bowed to union protests last month and abandoned a plan to lay off 4,000 workers.

The inconclusive debate prepared the ground for a report from a committee of "wise men" due in mid-January that will suggest ways to ease the crisis in European air transport that threatens to bankrupt some airlines.

British officials claimed a partial victory for liberalization Tuesday after Herman de Croo, a former Belgian transport minister and chairman of the committee, ruled out state aids and capacity controls as ways to salvage the industry.

European airlines lost a combined $4 billion in the last three years, but several carriers have reported improved earnings and increased traffic in the past few months.