Willie Walsh is aiming to create a supercarrier of four airlines in the next ten years, according to reports in the UK press.
The supercarrier would consist of BA, American Airlines (AA), Spanish flag carrier Iberia and Asia's Cathay Pacific.
All are member of the oneworld alliance.
BA is already in merger talks with Iberia (see story below) which Mr Walsh told British Sunday newspapers he expected to be completed within nine months.
He said he hoped talks with AA on closer co-operation would be finished in the next fortnight.
These talks, which also include Iberia, are expected to decide on an application for anti-trust immunity to the US Department of Transportation (DoT).
In his interviews with various papers, Mr Walsh repeatedly stressed that the BA-Iberia talks were "just the beginning."
He was quoted in one newspaper: "Iberia is the first of a number of deals. Consolidation involving an American, European and Asian airline would create a genuine global carrier."
BA reports 88% drop in Q1 profits
BA reported pre-tax profits for the first quarter of its financial year of £37m, a drop of nearly 88% on £298m for the same period last year.
The UK national carrier said its operating profits for the three month period was £35m, compared with £266m in 2007.
During the quarter, the airline said its fuel bill rose by 49%.
BA also announced that its planned to cut its winter schedule by 3.1% compared with last year.
Willie Walsh, its ceo, said: "We are in the worst trading environment the industry has ever faced.
"The combination of unprecedented oil prices, economic slowdown and weaker consumer confidence has led to substantially lower first quarter profits."
Mr Walsh said that fuel prices had doubled in the last year although a "successful hedging programme had reduced the impact."
He added: "We are well prepared. Since year end we have adapted our plans to reflect the fast moving and challenging conditions.
"We have reduced capacity in the winter schedule without compromising our network and at the same time we have the flexibility in the business to capitalise when conditions improve.
"We have revised our capital expenditure plans and are focusing on cost control."
Mr Walsh said merger talks were underway with Iberia (see story below) which would bring "significant" benefits.
Talks between BA, Iberia and American Airlines on closer co-operation were also "progressing well".
He said that Terminal Five at Heathrow Airport which suffered a chaotic opening was also now working well.
The airline said total revenue during the three months was up 2.8% from £2,197m in 2007 to £2,259m.
But "weaker consumer confidence, particularly in the US and the UK" had cut traffic volumes and the load factor was down 3.4% to 73.4%
BA and Iberia in merger talks
British Airways and Iberia are holding talks on an "all-share" merger between the two carriers.
The merger talks are backed by both airlines' directors and if the deal goes ahead, both brands would be retained.
A joint statement by the airlines also revealed that Iberia, the Spanish national carrier, had "recently" bought a 2.99% stake in the British airline.
The statement said that Iberia had also acquired "financial exposure to a further 6.99% through contracts for difference linked to British Airways' share price."
BA bought a 9% holding in Iberia in 1999 and increased this to 13.15% earlier this year.
BA was also part of a consortium, which included the Texan private equity company TPG, which tried to buy Iberia last year.
The deal fell through when a major shareholder, Caja Madrid which has a 22.99% stake in Iberia, indicated it wanted the carrier to remain in Spanish hands.
BA and Iberia are both members of the oneworld alliance and have worked together for many years.
The two airlines are also in talks with another oneworld partner American Airlines over a possible application for anti-trust immunity to the US Department of Transportation.
Willie Walsh, BA's ceo, said of the merger talks: "The aviation landscape is changing and airline consolidation is long overdue.
"The combined balance sheet, anticipated synergies and network fit between the airlines make a merger an attractive proposition, particularly in the current economic environment.
"We've had a successful relationship with Iberia for a decade and are confident that both companies' shareholders would benefit from the proposed tie-up."
Fernando Conte, Iberia's chairman and ceo, said: "A merger would be good news for our customers and enhance our existing relationship.
"We've worked together for nearly 10 years and a tie-up would build on that success.
"It would also strengthen the oneworld alliance and further develop Madrid's position as the European gateway to Latin America."
The merger talks are expected to last several months before any agreement is reached.
But BA said both parties were "confident of securing regulatory approval" noting that the EU had recently given BA and Iberia approval to co-operate on a wide front.
If the talks succeed, it is expected that the two carriers will set up a single holding company with a management structure with personnel form both airlines.
This is similar to the model used after the Air France KLM merger.
Under this structure, the holding company would acquire both the airlines but the existing airlines would run the separate day to day operations.
The news comes as BA is preparing to release its first quarter results on Friday (August 1) which analysts predict will reveal a sharp drop in profits.