BRITISH AIRWAYS and American Airlines are close to unveiling an alliance, initially expected to include joint marketing and codesharing of flights, but which could pave the way for a long-awaited US-UK open-skies agreement.
The tie-up, which is expected to be announced shortly, will give American the opportunity to build its operations at London Heathrow Airport. American is the only US carrier to base its European hub strategy around Heathrow, but it has suffered from restrictions on access to the congested airport.
BA will gain access to American's domestic network - which largely complements that of the UK flag carrier's existing partner, USAir - as well as services to South America.
The alliance is unlikely to receive US anti-trust immunity approval, however, unless US carriers are given greater access to congested Heathrow, arguing for a UK open-skies deal. BA says that it first requires greater freedom in US markets.
BA had risked being outflanked by European rivals such as KLM, Lufthansa and Swissair/Sabena which have now won anti-trust immunity to develop their alliances with US partners on the back of open-skies deals.
USAir chairman and chief executive Stephen Wolf confirms that the BA/American talks are taking place, but declines to comment on reports that BA is considering the sale of its 24.6% stake in USAir to American as part of any deal.
Wolf adds that USAir is not evaluating alliances with other European carriers, saying that USAir has a "superb alliance" with BA. BA says that the alliance contributed around $130 million in 1995 to its results. BA will not comment on the likely fate of the alliance in the wake of a tie-up with American.
Reports that Spanish state-owned carrier Iberia could be involved in the BA/American alliance have been dismissed by sources close to the discussions.
Source: Flight International