BA and American Airlines Alliance Nears Takeoff

06 August 2008

LONDON: Talks between British Airways and American Airlines are said to be nearing an agreement that would result in closer co-operation between the two air giants in areas including technology, ticketing and administration.

The duo are already members of the One World alliance – meaning that they already share some flight capacity and various facilities at airports – but the new compact would result in an even closer working relationship. 
Any agreement between BA and American would, however, require regulatory approval by the US Transport and Justice departments.

Such a green light has been refused on previous occasions when the two companies applied for immunity from competition laws.

The duo now believe the anti-competitive issue may be less of an obstacle, given the recently agreed Open Skies agreement which has  improved the position of rival carriers at key airports.

But competitor Virgin Atlantic has already said it will contest any partnership agreement, which it claims would effectively create a “dominant megapower” on routes between Europe and the US.

BA, currently in merger talks with Spanish airline Iberia, saw its profits dive 88% in the April–June period in the wake of rising fuel prices and slowing consumer spending on air travel.

Data sourced from BBC Online (UK); additional content by WARC staff