BA clinches its American tie-up
BRITISH Airways chief executive Rod Eddington is poised to announce a crucial tie-up with American Airlines on transatlantic routes on 7 January.
The deal, which BA believes will transform its prospects on key routes between the UK and America, has been secured after the personal intervention of Tony Blair.
The Prime Minister's strong backing for President Bush's war on terrorism gave added impetus to the agreement, which the airlines have been trying to reach for five years.
BA, whose passenger business fell nearly 18% last month, plans to share nine key transatlantic routes with American Airlines. The carriers already work together and claim the new deal will mean more frequent flights and a better service.
An announcement in the New Year that the US Transportation Department will exempt the two airlines from US anti-monopoly laws will coincide with statements from Washington and London that an 'open skies' agreement has been reached, say sources.
Open skies means new operators will be able to fly between Britain and America. That should mean a greater choice of flights and, possibly, lower fares.
January 7 has been earmarked as a likely date for the joint announcement, but officials admit that the Transportation Department may need more time to examine a bulky submission from Virgin Atlantic and US airlines, including Northwest and Continental.
A British aviation official said: 'We expect the Department to approve the application for anti-trust exemption and we expect an open skies agreement to be reached by early January. These developments will be announced simultaneously.'
Experts said the US had reversed its decision of five years ago - when the alliance first sought anti-trust immunity - because of shifts in the pattern of world aviation.
Jon Ash, managing director of the Global Aviation Associates consultancy in Washington, said: 'They were able to show that expansion of the alliance would not upset the balance among carriers. Also, Prime Minister Blair helped by asking President Bush in person that the deal be done.'
