Airport News Archive March 2010

March 9th 2010

British Airways and American Airways announce global alliance

American Airways and BA as expected have decided the best way forward is to cooperate on air fares and their respective schedules as a way to reduce operating costs. The American Department for transportation has already given the go ahead and now it will be the turn of the European competition authorities to have their say.

The first reaction from their competitors and most commentators is that this will reduce competition and push up costs especially where the airlines are already dominant. BA have countered by saying that this will allow customers access to a much larger network which will be dovetailed to make easier connections across Europe and the USA.

From their viewpoint the synergy is clear to see , by not clashing over the same routes they can either extend the number of  times per day that route is flown or simply reduce the number of flights depending upon traffic flows.

They also strongly contend customers by belonging to a bigger network will have a bigger choice of when they can travel with less time spent at airports waiting for their next connection because of the intended dovetailing. The airlines of Iberia, Finnair, and Royal Jordanian will also become part of this alliance. At the end of the day this is no difference to this alliance than the already existing Star Alliance

No doubt both airlines will also argue that the recession has changed the face of business travel and it makes economic sense for this alliance to be made when airlines all over the world are facing massive losses.

Virgin Atlantic have already entered the fray complaining that BA already holds 40% of the Heathrow slots including the lucrative travel market to the USA and with the tie up with AA and Iberia this will rise to nearly 50% and such dominance cannot be in the interests of the customers.

They are asking for a slice of these slots to be given over to other airlines including themselves.