British Airways approaches deal with American Airlines

BRITISH Airways and American Airlines could form an alliance within weeks. The deal, which comes after two failed attempts because of strict US anti-competition laws, will need the go-ahead from US regulators. British Airways chief executive Willie Walsh said that talks with the American company were “progressing well”. “Despite the difficult situation the industry is in, we are focused on the interests of our customers,” he added.

British Airways reported an 88 per cent profit drop between April and June and said the industry was in the worst trading environment “ever faced”, with fuel prices doubled since last year. The alliance with American Airlines would allow both companies to operate as a single airline, cutting costs and cooperating in prices and schedules, although a complete merger would be impossible under US laws.

The talks are taking place alongside separate negotiations with Spanish airline Iberia. American Airlines and British Airways are already working together in One World, an alliance to share flight capacity.

Tags: American Airlines , BA , british airways , Iberia , Spanish airline , talks ,

August 4, 2008