Airport charges at Frankfurt and Paris are, for example, up to 40 per cent higher than those at Heathrow There is little the EU can do directly about social costs. But if it does want to see Europe's open-skies policy deliver what it is supposed to - more choice and cheaper fares - then it could make a start by breaking the monopolies which ensure that handling charges remain exorbitant. Prudential, the UK's largest insurer, is believed to be stalking Birmingham Midshires Building Society as part of its strategy to turn itself into a banking, mortgage lending and financial services institution. British Airways has done it with Deutsche BA in Germany and TAT in France. From 1 January next year any airline will be able to operate domestic services in another member state.But the prospects of this happening are negligible because the costs of entry are too high.

These break down into social costs of employment - which the airlines can do little about - and operating costs, predominantly those levied by airports.In theory there is nothing to prevent any airline within the European Union setting up as a low-cost carrier in another member state and flying to a third member state. ValuJet and the host of other low-cost carriers that US deregulation has spawned may breathe a sigh of relief.There is precious little chance, however, of this phenomenon crossing the Atlantic in the foreseeable future Europe certainly has "no-frills" airlines. Anyone who has ever flown with the French domestic carrier Air Inter could testify to that. But there is a world of difference between no frills and genuinely low-cost air travel. The reason that Europe does not possess the latter lies in the much higher costs that airlines here suffer. Such a cautious reading of events may be correct, for way back in the early 1980s competing bids for Royal Bank of Scotland were blocked on the grounds that Scotland needs her independent companies. Scottish sensitivities, and the fact that all the main political parties need to pander to them, have if anything grown since then so it may be even harder to breach the Scottish ring-fence these days.But that won't stop either Barclays or HSBC, both of which have informally declared an interest in Bank of Scotland, from dusting off their dossiers.

Standard Life, too, will want to take a robust view of doing best by its policyholders, which could mean thinking hard about a single offer for the stake The market may have to rejudge this one Old Longshanks won't be giving up that easily.. Open skies kept on the ground The investigation now taking place in the US into the operating and maintenance procedures of ValuJet is a salutary reminder that while low-cost airlines may present minimum financial risk, there are other dangers in air travel that can never be completely overcome by any carrier. Until the inquiry is complete we cannot know what caused the ValuJet DC-9 to plunge into the Florida Everglades, killing all those on board The airline may be exonerated. For all its strengths as a well-run regional bank, with some not altogether persuasive international add-ons, it will be vulnerable amid the powerful forces at work in Britain's rapidly changing retail financial services landscape.Judging by the faint rise in the share price, the market believes the near-pounds 1bn stake, or whatever portion Standard Life decides to flog, will be quietly placed among institutions according to the unwritten codes of Fortress Scotland. The stake had become too large for a properly balanced investment portfolio. Moreover, the originally hoped for commercial ties never developed. But the bank never faced up to the reality of the unthinkable occurring.With the sale, the Bank of Scotland, the smallest of the eight big British banks, will be bereft of the protective shield it has enjoyed for the past decade. It was informed some while ago that Standard Life intended to sell all or part of its 32.5 per cent stake.

Judging, however, by the way Sir Bruce yesterday flounced off the board of Britain's leading life mutual, he might have been cast in the role of William Wallace to that of Norman "Robert the Bruce" Lessels, the chairman of Standard Life. The message conveyed with determination over recent days that all is bonny between these two august Edinburgh houses is fast coming apart at the seams. The reality is that the Bank of Scotland is running scared and feels more than a little betrayed. The boardroom is often as guilty as the press when it comes to "the real world".. Uncomfortable moments north of the border The likeness between Sir Bruce Pattullo, governor and group chief executive of the Bank of Scotland, and Mel "Braveheart" Gibson may not be immediately apparent to fans of tartan lore. It is not the cynicism of the media that led to the row over Cedric Brown's salary; it was the cynicism and shamelessness of a company that could award its chief executive a 75 per cent pay increase at a time when there was vicious downsizing, complaints were soaring and, yes, profits were plummeting too.