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American Airlines deal would up its trans-Atlantic ante

American Airlines jets at Chicago's O'Hare Airport.

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Steve Chiotakis: Today could be a big day for American Airlines. The company is waiting for word from European regulators whether it can coordinate its trans-Atlantic flights directly with British Airways and Iberia. Why is it such a big deal? Marketplace's Jeremy Hobson has more.


Jeremy Hobson: American Airlines, British Airways and Iberia are already in the same frequent flier alliance. But the deal on the table would push their partnership to a new level. The carriers would be able to coordinate the times and prices of their trans-Atlantic flights. And perhaps most importantly, they'd share revenue.

Seth Kaplan of Airline Weekly says on the lucrative New York to London route, for instance:

Seth Kaplan: Now they'll basically be one airline in that market, they'll be able to optimize everything together instead of competing against each other.

He says that'll mean more money for American Airlines. The carrier is on the verge of falling to third place in the U.S. following the merger of Delta and Northwest and the pending merger of United and Continental.

Kaplan: You know American doesn't make money flying in short-haul markets, but they can make money flying long-haul, and this is very important for that reason.

American has tried and failed to do this in the past. But Kaplan says this time, the regulatory atmosphere is just right. The deal has already been approved by U.S. authorities.

In New York, I'm Jeremy Hobson for Marketplace.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.
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