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British Airways is hoping to build an alliance with two of its largest US rivals in a move which would help position the company at the forefront of the lucrative trans-Atlantic market.
A spokeswoman confirmed last night that BA, which is still reeling from the disastrous opening of Heathrow's Terminal 5 last month, was "exploring opportunities for cooperation" with American Airlines and Continental Airlines. But she refused to provide details.
The deal is unlikely to involve a full merger with either carrier, which would be blocked by US and EU foreign-ownership laws. But if the three carriers can secure limited immunity from US competition laws, they will be able to offer smoother connections by coordinating schedules and route planning. A source familiar with the negotiations told Reuters that such an agreement would help the companies streamline costs while sharing revenues.
An alliance with American would allow BA to extend its reach into Latin American, via the US carrier's hub in Miami.
BA and American Airlines already cooperate through the 10-member Oneworld alliance and have twice sought antitrust immunity. In 1997 and 2001 they were stopped by regulators who would only approve their application if the two airlines disposed of some of their valuable landing slots at Heathrow.
Regulators have long been concerned that stronger American/BA ties would jeopardise competition at Heathrow for other US carriers. But restrictions on air travel between the US and the EU have eased under an "Open Skies" agreement. Yesterday BA's chief executive, Willie Walsh, called for restrictions barring the possibility of a merger with a US rival to be lifted.

SoCalGuy

Not if "Sir" Branson has his way.....would like to see the BA/AA/CO alliance, but may be harder than that.....we'll see.

Virgin: Any British Air/AMR/Continental Tie 'Anticompetitive'

April 30, 2008: 02:54 PM EST

CHICAGO -(Dow Jones)- Virgin Atlantic Airways Ltd. said Wednesday a proposed three-way marketing tie among British Airways PLC (BAIRY), AMR Corp.'s (AMR) American Airlines and Continental Airlines Inc. (CAL) would be anti-competitive.
Richard Branson, president of Virgin Atlantic, weighed in after British Airways said it was in talks with the U.S. 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."
Virgin and BA have been involved in a longstanding feud, which saw Branson's airline paint "No Way BA-AA" on some of its aircraft and win a legal victory over alleged "dirty tricks" carried out by its bitter U.K. rival.
"This triple whammy would reduce effective competition across the Atlantic, and the regulators should make it absolutely clear that it would have no chance of getting off the starting grid," said Branson of the three-way talks disclosed on Wednesday.
"This combination would act against the interests of passengers and Virgin Atlantic will fight tooth and nail to ensure that regulators say no way BA/AA/ Continental."

tsquare

Branson is a turd.

DYNASTY HVY

Sir Richard has a point and if the SHOE was on the other foot so to speak you can bet the farm that American carriers would also raise hell if EU carriers proposed the same kind of deal !



You can teach monkeys to fly!