I wonder if this is somehow linked to the well publicised BA / Amex falling out? As others have pointed out here, the Tesco Visa will now be almost as good as the BA Amex for miles earning, and once the '2 for 1' voucher scheme stops people may give up on Amex because of the fee.

Assuming BA drop Amex (or vice versa) in 2006, BA will need a new credit card partner. Tesco may be a bit down-market for them, but given the strength of the current relationship it would not be totally surprising to see a joint Tesco / BA branded card. (And, though my memory could be playing up here, isn't the Tesco card managed by RBS, which owns NatWest, which is also a BA partner?)