15 August 2008

BA confirms tie-up with AA and Iberia

British Airways have confirmed plans for a three-way link-up with American Airlines and Iberia.

The three carriers are seeking worldwide anti-trust immunity from the Us Department of Transportation for a joint business agreement on transatlantic flights and to expand co-operation globally.

The Oneworld alliance members aim to improve schedules, provide better connections and enhance frequent flyer benefits.

Fellow Oneworld members Finnair and Royal Jordanian are included in the anti-trust immunity application.

BA and AA argue that six airlines in the rival SkyTeam grouping and nine in the Star Alliance have such immunity.

But Virgin Atlantic founder Sir Richard Branson has already lobbied US presidential candidates against the BA-AA tie-up, protesting that it will be anti-competitive on North Atlantic routes.

The BA-AA-Iberia proposal would create an entity serving 443 destinations in 106 countries with more than 6,200 daily departures.

The pact calls for expanded codeshare arrangements on flighst within and beyond the EU and US which would "significantly" increase the number of destinations offered by the carriers.

ââ¬ÅâœThe joint business agreement will enable the airlines to reduce costs and attract new customers, helping to mitigate pressure on fares from record fuel costs,ââ¬~ a statement said. 

BA chief executive Willie Walsh said: "We are applying for EU US anti-trust immunity in a changed regulatory world where London Heathrow is open to any US or EU airline to fly to the United States and where rival alliances have immunity."

Walsh reportedly denied speculation that BA would have to give up some Heathrow take off and landing slots in order to win approval for the deal.

AA chairman and president Gerard Arpey said: "We believe our proposed co-operation 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.

"In addition, we believe we will be more effective competitors with greater ability to invest in our producst and services."

Iberia chairman and chief executive Fernando Conte said: "It will increase competition as the three global airline alliances will play under the same rules.

"We are taking a very important step towards consolidation which is necessary in today's aviation industry."  

by Phil Davies

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• No Government Help, IATA?
  
  

  IATAs talking head, Giovanni Bisignani - Director General and CEO (ex-Alitalia), complains, ad nauseum, that governments don't help airlines enough. Excerpts from this story show how, in so many ways, airlines get all manner of assistance. "The three carriers are seeking worldwide anti-trust immunity from the Us Department of Transportation for a joint business agreement on transatlantic flights and to expand co-operation globally." and "Fellow Oneworld members Finnair and Royal Jordanian are included in the anti-trust immunity application. BA and AA argue that six airlines in the rival SkyTeam grouping and nine in the Star Alliance have such immunity." If anyone else tried this (price fixing, etc) without immunity they would end up doing time in jail.

  By Jon Hewson, Monday, August 18, 2008