BA, American Airlines get closer

Stephen Beard Aug 4, 2008
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BA, American Airlines get closer

Stephen Beard Aug 4, 2008
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Stacey Vanek-Smith: Last week, the Footsie got hit when British Airways reported quarterly profits had fallen about 90 percent. Now the carrier is looking for somebody to lean on. BA is going full steam ahead with plans to merge with American Airlines. Stephen Beard has more.


Stephen Beard: This is not a marriage — just a deeper relationship. BA and American are already partners in the One World Alliance. At a time of crisis in the airline industry, they want to huddle closer together. They want to cut costs, coordinating flights and fares, perhaps running a joint frequent flyer program.

The two airlines feel at a disadvantage. Lufthansa and Air France both operate very closely with U.S. carriers. BA and American need to be allowed to do the same, says Tim Coombs of Aviation Economics:

Tim Coombs: They are handicapped to a certain extent in being able to compete. So it would be an important, good, strong step forward for both carriers.

BA and American have tried this before, but failed to win the support of regulators. This time, they believe they’ll succeed, because the Open Skies Agreement has opened up competition in transatlantic air travel.

In London, this is Stephen Beard for Marketplace.

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