British Airways near merger deal with American Airlines

News reports indicate that British Airways is closer than ever before to signing a merger deal with its oneworld alliance partner, American Airlines, and it is possible that an official announcement may be forthcoming within less than two weeks. British Airways has, however, tried merge in the past, but the carrier’s efforts were in vain, often due to a lack of approval from regulatory bodies. Yet the airline appears especially determined this time around, considering that it is becoming increasingly difficult for all carriers to tackle rising fuel costs and a decline in the number of passengers, due to acute fears of a recession.

In addition to the planned merger with American Airlines, British Airways is also looking into a possible fusion with Iberia, Spain’s flag carrier. Both American and Iberia are members of the oneworld alliance, which means that British Airways already cooperates with these carriers in terms of code-share agreements, as well as allowing frequent fliers to collect and redeem reward points on all flights.

Willie Walsh, British Airways’ chief executive, told journalists that he would like to proceed with both mergers as soon as possible. According to unconfirmed reports, British Airways and American Airlines would essentially operate as a single carrier in terms of transatlantic flights. Yet some analysts point out that this may be more difficult to achieve than it seems, as state regulators have rejected similar proposals in both 1997 and 2002. The merger, however, is seen as one of the most effective ways to cut down on costs for both carriers.

Thank you to InTheNews for the initial report.

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