British Airways CEO Willie Walsh has confirmed that the carrier is in talks with oneworld partner American Airlines over forming a transatlantic joint venture agreement, and says he expects the two airlines to make a fresh application for antitrust immunity within the next two weeks.
Talks with American are “progressing very well” and are “taking place against the backdrop of a changed regulatory environment”, says Walsh.
“We’re looking at concluding those discussions within the next two weeks and we expect to move forward with an application for antirust immunity within the next two weeks. This is a joint venture between us on the transatlantic and I think it will represent significant benefits to consumers, particularly in the area of frequent flyer programmes.”
This will be the third time BA and American have applied to US regulators for antitrust immunity; previous attempts have been unsuccessful due to the two carriers’ high proportion of slots at London Heathrow and dominance on the Heathrow-New York route.
But Walsh is confident that things will be different this time because “the landscape has changed out of all recognition to the last time we made an application back in 2000/2001”.
The planned joint venture between BA and American is “very much dependent on getting antitrust immunity” and is therefore not expected to be in place in time for next summer.
“I think it would be ambitious to expect that to happen by next summer and it certainly won’t happen any earlier than that,” says Walsh.
“We’d like to think that it will happen as quickly as possible but I think it’s unlikely that we’d get all of the approvals in place by summer 2009.”
Walsh does not see the planned antirust application being affected by the upcoming US presidential election, and says: “If we can get our application filed before the end of August – and as I said our expectation is to finish our discussions and file within the next two weeks – it’s not going to be impacted by presidential elections in the US.”
Another factor Walsh believes will go in BA and American’s favour when they file for antitrust immunity is that “clearly oneworld is at a disadvantage to SkyTeam and Star when it comes to competition between the alliances”.
Earlier this year SkyTeam received antitrust immunity approval for a tie-up between Delta Air Lines and Northwest Airlines and European carriers Air France, Alitalia, Czech Airlines and KLM.
Star Alliance members United Airlines, Lufthansa and Air Canada are also attempting to add Continental Airlines to their existing transatlantic immunity when the carrier joins the alliance from SkyTeam.