AA and BA Renew Atlantic Alliance Appeal to Regulators

06 August 2001

American Airlines and British Airways are again knocking on the doors of European and US regulators in a bid for approval of their would-be transatlantic marketing alliance.

The partnership, first mooted in 1996, bumped along the runway for three years until 1999 when take-off was aborted after failure to agree with regulators on the number of take-off and landing slots the duo would concede to rival airlines at London’s Heathrow Airport.

In a bid to catch-up with an increasing number of successful rival alliances, American and BA are expected to seek antitrust immunity for the sharing of pricing, marketing and scheduling data – all areas that would normally constitute illegal collusion.

In a preliminary move, the two airlines signed a commercial agreement on Friday, covering nine routes between London and US cities, among them New York, Dallas, Chicago and Los Angeles. This will be submitted for approval to regulators in Washington, London and Brussels early this week.

However, rival airlines are expected to argue that BA and American already dominate certain routes – for example to JFK in New York and to Dallas – and between them command a far higher number of take-off/landing slots at Heathrow and Gatwick (London’s second airport) than any other alliance.

Says BA chief executive Rod Eddington: “I believe the world has changed substantially since the last time. I think we've got a good chance of getting the deal approved at a sensible regulatory price." But, he warned, “it is not a deal we will do at any price.”

However, the crux of the deal hangs on a far larger issue – that of unfettered access for US airlines to British airports – an issue much debated over the years between the two countries and as yet unresolved.

News source: Wall Street Journal