American Airlines and British Airways announce new alliance and file for antitrust immunity (03/08/2001)

British Airways and American Airlines today unveiled plans for a new alliance that would boost competition, deliver significant benefits for international air travellers, and move toward a level playing field with other global airline alliances.

Key consumer benefits would include access to more destinations and more convenient schedules, extending lower fares to a wider range of destinations, greater ease of transfer, a more attractive frequent flier program, greater ticket interchangeability and new improved check-in and luggage facilities.

Although there will be no immediate affect on British Airways employees, the deal is likely to lead to co-location of operations at some airports. Employees and Trade Unions as appropriate will be consulted throughout this process. There are no plans to merge the two workforces.

The companies will file applications for antitrust immunity in the United States and clearance for their proposals in the United Kingdom and with the European Commission over the coming days. Both airlines are eager to work with regulatory authorities to gain the necessary approvals and help create a positive climate for "open skies" between the United States and United Kingdom, giving passengers a far greater choice of carriers. In line with the competing airline alliances, the new relationship would include a widescale codesharing agreement.

Commenting on today's announcement, Don Carty - American Airlines' Chairman/Chief Executive and Rod Eddington - British Airways' Chief Executive, said: "We simply want to have the same commercial advantages and deliver the same consumer benefits that rival airline alliances and their passengers enjoy. Antitrust immunity and codesharing would put us on a level playing field with other alliances and set the stage for a US-UK open skies agreement."

The new alliance includes a profit sharing arrangement covering nine transatlantic routes between London and Boston, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Raleigh/Durham, St. Louis and San Francisco. Antitrust immunity and codesharing would allow American Airlines and British Airways and the larger oneworld alliance to compete more effectively with rival alliance networks.

Since the beginning of the British Airways-American Airlines relationship in 1996, dramatic changes have taken place in the transatlantic aviation marketplace. Competing alliances now enjoy varying degrees of antitrust immunity and codesharing approvals that American Airlines and British Airways have yet to obtain.

"We are eager to work with regulators to gain the appropriate approvals. All parties should take notice of the dramatic changes in the transatlantic marketplace over the last five years. Progress towards open skies and greater alliance competition will benefit all passengers," said Carty and Eddington.