Business World

Sunday 11 December 2016

Airlines' transatlantic link-up gets go-ahead

Published 22/07/2010 | 05:00

British Airways, American Airlines and Spain's Iberia will begin a long-awaited business venture in the autumn that will see the trio sell tickets jointly and schedule their flights on transatlantic routes.

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The three have claimed the deal will herald an intensification of airline competition between destinations in the US and Europe.

The European Commission gave the tie-up the green light last week, while the US Department of Transportation gave the go-ahead yesterday.

The agreement is likely to result in annual savings of about £230m (€273m) for British Airways as it co-ordinates pricing and schedules with American Airlines. BA, headed by former Aer Lingus boss Willie Walsh, is planning to merge with Iberia by the end of this year.

Entrepreneur Richard Branson, who owns Virgin Atlantic, has been a vociferous opponent of the agreement between his rivals. Yesterday, he said the deal was creating a "monster monopoly" and that the seal of approval from the US was a "bad day for consumers".

Monopolies

"The lesson that big corporations wishing to create anti-competitive monopolies can draw from this debacle is to keep applying year after year until they finally find regulators and politicians willing to wave the application through -- no matter what the cost is to consumers," he said.

British Airways maintains that the link-up between the three airlines -- which are all members of the OneWorld airline alliance that at one time included Aer Lingus -- will provide customers with greater access to discounted fares. BA and American Airlines had to yield some slots at Heathrow Airport in order for the agreement to be given the thumbs up.

Airline analyst Joe Gill at Bloxham Stockbrokers in Dublin told the Irish Independent the agreement between the three carriers was unlikely to have any impact on Aer Lingus, which had scaled back its transatlantic services in the face of the diabolical state of the domestic economy.

"Other than the fact that this makes BA, American Airlines and Iberia a formidable force, there's nothing specifically new. This has been anticipated for two years," he said.

Irish Independent

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