British Airways” (BA) share price rose 9.25p (4%) this morning (1 May) as it confirmed it is in talks with US competitors to co-operate more closely.
”British Airways is exploring opportunities for co-operation with American Airlines and Continental Airlines,” said the carrier in a brief statement. ”Further details will be announced when appropriate.”
When Continental broke off merger talks with United Airlines on Monday the carrier”s chairman and CEO Larry Kellner indicated that a change of airline alliance may be on the cards to see the airline through the current tough economic times: ”We are considering alternatives to SkyTeam as we carefully evaluate which major global alliance will be best for Continental over the long term,” he said.
BA and American are already oneworld partners, but if Continental joined them it will create a powerful transatlantic triumvirate paving the way for co-operation in the form of more aligned schedules, code-sharing and joint frequent flier programmes.
Such an alliance would be highly competitive in the new Open Skies market.
Sir Richard Branson, Virgin Atlantic president, said: "When BA and American first tried to get together a decade ago, the regulators ruled it was against the consumer interest. Nothing has changed. A link-up between BA and American is still anti-competitive and now they have the cheek of trying to add Continental to the mix too.
”This triple whammy would reduce effective competition across the Atlantic and the regulators should make it absolutely clear that it would have no chance of getting off the starting grid. This combination would act against the interests of passengers and Virgin Atlantic will fight tooth and nail to ensure that regulators say no way BA/American/Continental.”
There is media speculation that a full merger between BA and American is back on the cards, but their previous attempts were thwarted by regulators demanding too much in return in the form of relinquished Heathrow slots.
However, later this month meetings will take place regarding Phase II of Open Skies which could allow European carriers to buy US counterparts - currently they are not permitted to do. A decision on this must be reached by 2010.
” Speculation is rife that BA”s long haul move to Terminal 5 will now only be completed in October, but neither the airline nor BAA would confirm this.
”We”re still in the decision process and there are no confirmed dates as to the next switch ” we”re fairly close to a decision, because we”ll need to communicate to passengers where they need to be [for flights],” a spokeswoman told ABTN.