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Sunday, August 03, 2008
 

British Airways seeks to seal alliance with American Airlines


BRITISH AIRWAYS will make a third attempt to seal an alliance with its US partner American Airlines within weeks.

Willie Walsh, BA's chief executive, said he expected final preparations for the deal to be complete within a fortnight, with an application to US regulators to follow shortly afterwards. "We want to move on this as soon as possible," he said.

BA, which revealed sharply reduced profits last week, has tried to consummate its marriage with American Airlines for more than a decade. It first sought the permission of US regulators in 1997, then again in 2002.

The two airlines want to be exempt from America's tough anti-competition laws. This would allow them to run their transatlantic operations as a single company, with co-operation on pricing and schedules. A full merger of the companies is made almost impossible by America's strict airline-ownership laws.

Regulators rejected earlier attempts at an alliance because the arrangement was judged to be anti-competitive.

The deal with American may be expanded to bring in two other airlines, Iberia of Spain and Continental of the US. BA and Iberia last week announced plans for a full merger, details of which are likely to be announced in a few months.

Meanwhile, Walsh condemned government plans to drop air-passenger duty in favour of a flight tax.

"Aviation already more than covers the cost of its greenhouse gases through taxation and duty," he said. "This is nothing more than a revenue-generating exercise by the government."

Walsh said he supported aviation's inclusion in the European emissions-trading scheme, rather than the imposition of blanket taxes.

Source: timesonline.co.uk

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