BA says in talks with American, Continental
 

<i>British Airways said on Wednesday it was in discussions with two of its largest U.S. rivals, American Airlines and Continental Airlines, which a source briefed on the matter said was about a potential alliance.

Such a collaboration would create a powerful force in the lucrative trans-Atlantic market, bringing Britain's flag carrier into closer co-operation with American, the world's biggest airline by traffic, and Continental, the U.S. No. 4.

</i>

http://www.reuters.com/article/marke...0080430?rpc=44

<i>American Airlines and British Airways Plc are in talks to expand their Oneworld alliance to add Continental Airlines Inc. and secure antitrust immunity to set prices and schedules, people familiar with the talks said.</i>

http://www.bloomberg.com/apps/news?p...d=aiXbyYX6dfuE


This alliance thing is starting to look more serious everyday....

My take is that the 3 airlines will ask for more exemption than the previous AA/BA agreement, so that the ties between AA and BA can get stronger too. In fact, in the future, AA and BA's US-London routes can also be codeshare and earn miles.

Why?

1. Open skies,
2. Approval of the AF/KL/DL/NW/AZ/OK anti-trust exemption,
3. DL buying NW.

AA/BA/CO will argue that they should also be allowed broadened alliance.

I think this will go through. IThe AF/KL/DL/NW/etal JV seemed to barely get a second look. And don't forget that LH/UA have a similar exemption, as well as codeshares with a host of other European airlines.

Perhaps the BA/AA group should have to give up some slots at LHR, but I would hope that the authorities don't ask for a king's ransom, as it would seem a bit unfair.

Of course, this will mean the end of the CO codeshares with VS. And I wonder what this will mean for VS. Will they perhaps jump to *A? Or will they just seek out some new US partners?

Does look more serious every day. And alliances are easier to implement than mergers. Regardless of whether it's an alliance or merger, these airlines are still going to have to undergo some major restructuring to get costs under control.

In today's WSJ, an article says CO's current Skyteam agreement runs till 2012, and they can only get out if DL/NW completes its merger and CO gives them 9 months notice after.

Still nothing stopping a bi-lateral agreement with AA and BA, in the interim.

I'm also curious about how much latitude CO has to restrict things like mileage earning on other ST airlines, or soft benefits like pre-boarding, etc. I would think that, if CO wanted to, they could effectively be a member of ST in name only. I would also think that the rest of ST could make CO a member in name only, as well.

I certainly haven't read the terms of the ST agreement (and haven't read the WSJ article rkkwan refers to), but if NW/DL were to marginalize or otherwise adversely affect or shut-out CO, it may give them grounds to terminate earlier. Will be interesting...

Do you think this will effect FF Mile awards for AA? Currently I can get to Europe or Central America from US for 40,000 miles on AA. I believe BA is 65,000 US to Europe.

I don't fly BA anymore because they don't give full FF Miles, only 1/4th.

I was told by an Alaska Air agent that August is the month FF Awards often change. I'm expecting American to go up then.

Will the Alliance effect any of this?

Good questions Giselle, I'm posting to bookmark.

AA and BA alliance has been around for years yet each airline does what it wants with it's own mileage program. If CO were to join I believe it will be the same situation. Just like AA sets it's own rules and BA their own rules, CO will set theirs.