British Airways mulls partnership with American Airlines

Although British Airways has indicated that it has not reached any decision to merge with its oneworld partner, American Airlines, the United Kingdom’s flag carrier is said to be on the verge of signing a partnership which would see the two companies share revenue on some flights. Analysts have pointed out that this strategic partnership is important for both legacy airlines, as they struggle to deal with high fuel prices and consolidation in the commercial air travel industry, which includes a number of high-profile mergers, such as that between Delta Air Lines and Northwest. If the revenue sharing deal goes through and both carriers sign on to the plan, British Airways and American Airlines will become the undisputed lead player when it comes to transatlantic flights between London and major cities in the United States. In fact, according to the initial projections, a revenue-sharing agreement would allow the two carriers to control 50 percent of this highly lucrative and important market.

Although official sources have yet to confirm this new deal, industry experts believe that this is meant as BA’s and American Airlines’ response to a similar agreement among Air France, Northwest and Delta, when it comes to the transatlantic market. Andrew Lobbenberg, representing the Bank of Scotland, pointed out that British Airways has thus far been left out in the cold, in term of airline mergers. Although there had once been talk about a merger between BA and Iberia, this never came to fruition, and if BA continues to ignore consolidation in the industry, it will be ever-more dramatically eclipsed by fused giants, like Air France-KLM. Reuters quoted analysts who estimated that there was now a 50 percent chance that the revenue sharing deal will go through in the very near future.

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