BA, American Airlines and Continental in talks to form an alliance
Published: 01 May 2008
British Airways is exploring opportunities for cooperation with American Airlines and Continental Airlines.
independent.co.uk reported that as a first step, the discussions now under way are likely to be centered on forging deeper code-sharing partnerships.
"Rivals fear, however, that BA and American could use any agreement reached now as a starting point to once again attempt a long-desired merger of the two companies. Regulators approved the first attempt in 2001 but studded their approval with so many onerous conditions that the companies scrapped the deal," it added. "A combination of BA and American, the largest carrier in America, would yield a giant with two-thirds of the slots at Heathrow for transatlantic flights. The addition of Continental, which earlier this year spent $209m on four sets of take-off and landing slots at Heathrow, would create one of the largest airlines in the world."
According to timesonline.co.uk, discussions are not thought to include any plans for a merger, as current foreign ownership rules of US airlines would rule out such a move. Rather, if the carriers successfully applied for immunity from antitrust regulators this could potentially give them the right to co-operate over fares and frequent-flyer programmes as well as co-ordinating schedules.
BA and American Airlines are already partners in the oneworld global alliance. Talks are likely to involve Continental joining this group.
Continental said it would stay independent for the time being but would "continue to review potential alliances and our membership in SkyTeam".
"We are considering alternatives to SkyTeam as we carefully evaluate which major global alliance will be best for Continental over the long term," it said.
For its part, Virgin Atlantic Airways Ltd. said a proposed three-way marketing tie among British Airways, AMR Corp.'s American Airlines and Continental Airlines Inc. would be anti-competitive.
Richard Branson, president of Virgin Atlantic, weighed in after British Airways said it was in talks with the US carriers.
"When BA and AA first tried to get together nearly ten years ago, the regulators ruled it was against the consumer interest," said Branson of British Airways and American Airlines in a statement. "Nothing has changed. A linkup between BA and AA is still anti-competitive, and now they have the cheek of trying to add Continental to the mix, too."
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