BA nearing agreement with American Airlines

Current talks between British Airways and American Airlines could lead to an alliance within weeks, according to industry observers.

The merger deal, which follows two previous attempts that failed due to the strict anti-competition laws in the US, will require approval of US regulators.

The chief executive of British Airways, Willie Walsh, said that his company’s talks with American were “progressing well.” He added: “Despite the difficult situation the industry is in, we are focused on the interests of our customers.”

Last week, British Airways reported a drop of 88 per cent in profits in the three month period from April to June, and the carrier’s boss characterized the trading environment as the worst the industry “ever faced,” with the price of fuel having doubled over the last year.

An alliance between BA and American Airlines would allow the carriers to operate as one airline, cutting operating costs and being able to cooperate in pricing and route scheduling, although a full merger would not be possible under exiting laws in the US.

The merger talks are occurring at the same time that BA is conducting separate negotiations with the Spanish carrier Iberia.

The three air airlines are currently involved as partners in the One World alliance, and a new deal would bring about much closer cooperation among the three in administration, technology and ticketing.

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