British Airways claims alliance with American Airlines

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(Xinhua)
Updated: 2008-08-15 08:03

LONDON -- British Airways, which has been code-sharing with American Airlines, claims on Thursday to have sealed an alliance with American Airlines that will allow them to agree fares, routes and schedules together.

The transatlantic alliance will also include Spain's Iberia, which is merging with BA, the British airline said.

From 1 September 2003, British Airways began introducing over one hundred new codeshare destinations to its network following the finalization of its codeshare agreement with American Airlines.

British Airways' flight codes have been placed on American Airlines' flights, beyond BA's current US destination cities to points in the US, Canada, Latin America and Caribbean.

With aviation fuel prices near record levels and spending on air travel slowing, airlines are looking at ways to cut costs, BBC said on Thursday.

Under the business agreement, the three airlines will cooperate on flights between the US, Mexico and Canada and the EU, Switzerland and Norway.

"We believe our proposed cooperation is an important step towards ensuring that we can compete effectively with rival alliances and manage through the challenges of record fuel prices and growing economic concerns," said Gerard Arpey, chairman and chief executive of AMR Corp, the parent company of American Airlines.

However, BA's rival Virgin Atlantic, owned by Sir Richard Branson, said the plan would reduce competition in the airline industry.

The two carriers will have to persuade the US that the deal does not break US rules on foreign ownership of airlines, BBC said.

Despite the claims by the two airlines that their tie-up will help them to cut costs, experts insisted that the alliance of two of the world's leading airlines is regarded as "unlikely anti- competitive."

The airlines said they planned to apply to the US Department of Transportation for immunity from US anti-competition rules and they would also notify European regulators.

They have previously failed to win an exemption from these laws because of their dominance at Heathrow, where BA and AA control nearly half of all the landing and take-off slots to the US from the airport.