News: BA sign transatlantic deal with American and Iberia
Flights > News > # 1863 (18/08/2008)
British Airways, American Airlines and Spanish carrier Iberia have signed a joint business agreement on flights between Europe and North America.
A deal between the trio will be strongly opposed by BA’s bitter rival Virgin Atlantic, which has warned that it would lead to a cut in competition on transatlantic flights.
BA, American and Iberia argued that a closer relationship on pricing and seat capacity will benefit customers by providing improved connections and flight schedules.
Under the joint business agreement, the three airlines will cooperate commercially on flights between Europe and the US, Canada and Mexico while continuing to operate as separate entities.
They will expand their codeshare arrangements on flights within and beyond the EU and US, significantly increasing the number of destination choices that the airlines can offer customers.
BA and American have failed in the past to win an exemption from US competition laws to work more closely together because of their dominance at London Heathrow, where the pair have more than half the capacity to and from the US.
However, they are expected to argue that the competitive situation has changed since the "open skies" agreement between the US and the European Union came into force in March, allowing airlines from both sides of the Atlantic to fly to and from any point in the US and any point in the EU.
Virgin Atlantic boss Richard Branson said a closer relationship between the two carriers would result in higher prices for customers, adding it was "very dangerous" to believe that consolidation was the best response to the current difficult economic conditions.
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