FAAA

LONDON, Jul 06, 2008 (Thomson Financial via COMTEX) -- BAIRY | Quote | Chart |
News |
PowerRating -- British Airways Plc is poised to unveil a transatlantic alliance
with AMR
Corp unit American Airlines and Iberia of Spain, with an announcement expected
at the
airline's annual meeting on July 15, according to The Observer.
The newspaper did not name its sources, but said three days later, executives
from the
companies will meet US transportation secretary Mary Peters to seek anti-trust
immunity.

Analysts say the tie-up between BA, headed by Willie Walsh, and AA could pave
the way
for a full merger once US foreign ownership rules are liberalised, according to
the article.

Iberia has been brought in relatively late in the negotiations, which have been
dragging on
for months. But terms have now been agreed that will see the airlines share
ticketing,
fares, marketing and the purchasing of fuel and aircraft, the newspaper said.

Any deal would lead to economies of scale and enable the three airlines to
cross-sell
tickets to business customers on highly profitable routes between western Europe
and
North America, it added.

An agreement has been spurred by the introduction of Open Skies, which allows
more
national carriers to fly between the US and major European centres. Other
factors at play
are the soaring cost of fuel and the deteriorating economic climate.

worldwidedreamer

Rumors will circulate until and if an announcement is made. Move on folks.

nd_eric_77

would this mean we could finally earn miles, EQMs & EQPs for flying BA TATL??? I still don't understand the motivation of that policy - unless it is to cripple OW and prop up ST & *A (who don't have such asinine restrictions with their biggest Euro partners).

yellow77

This (rumour)(story)(news)(whatever) is not about a merger; it's about seeking the ability to coordinate pricing and schedules and mutually codeshare on TATL flights, like AF, KL, NW, DL, and OK enjoy now on the Skyteam side of the fence, and UA and LH do in *A (and as UA and CO have announced plans to do in the future).

videomaker

Did you read the article? Speculation, yes, and we all know how "analysts" can miss the mark. But it does mention a possible merger.

yellow77

'Once US foreign ownership laws are liberalised', ie, when the moon is made of green cheese. Repeat, the story is about a marketing alliance; as you point out, it also contains some essentially baseless speculation about how this might, in many years, if something that is not currently on the table at all happens, lead to a merger. That is, the news here is not about a merger.

jabrams72

Update.

According to the pink paper, BA and AA have agreed, but now it's a question of working out IB details before filing.

JDiver

If you really want to learn how this came about, the Unofficial Users' Guide sticky thread has a link to the full Bermuda II agreement. As to how much BA would welcome full mileage earning / burning rights transat, well, I'd hesitate to guess; BA has not always played nice (ask Richard Branson and SWISS executives.)

JDiver

We'll certainly stay interested in this interesting development!

CO FF

It's "possible" that George W. Bush will submit and become a Muslim tomorrow.
It's "possible" that Alex Rodriguez will quit baseball and devote himself to charity.
It's "possible" that AA, BA & IB will merge.

And, in fact, the AA+BA+IB merger is the most likely scenario of the three I listed above.

So, now, you can quote me as having said "the "AA+BA+IB merger is the most likely scenario".

Personally, I'd bet on the snowball in hell first...antitrust immunity (a la SkyTeam, or UA/LH) yes, merger - no.

JDiver

The title has been slightly modified for membership convenience.

/Moderator

nd_eric_77

I thought "OpenSkies" was supposed to make Bermuda II obsolete; is this incorrect?

JDiver

It is indeed - but it is the reason for the miles issue, and they may chose to stick with it as a fait accompli that provides benefits (largely to BA, I suspect.) "But, we've always done it that way!" seems to be a persistent condition among some companies and employees, and a very tired blame system, but it's still in daily use.)

I also wonder if OpenSkies will ultimately render AA miles. Ah, hope...

bernardd

Open Skies elminates the traffic rights restrictions of Bermuda II, but doesn't provide immunity from Anti Trust legislation where carriers collude to the detriment of the consumer. VS have already begun rattling their cage over the dominant market position AA & BA will have at LHR by working together. Whether that applies to co-operation on FF schemes as well as revenue & profit sharing, agreements on scheduling etc etc is far from clear.

The other question that's been raised in other threads is the impact reciprocal earning and burning will have on the more lucrative premium cabins and whether this is in AA's interest or not.

nd_eric_77

As for premium cabins, it would seem that allowing BA members to earn miles on AA TATL flights would provide AA with higher demand for their J & F seats - especially given the current strength of the GBP... seems like it could be a net positive for AA (even though some AAdvantage members would doubtless choose BA over AA for TATL).