British Airways And American Airlines Merger In Perspective

Recent announcements by British Airways of a possible tie-up between themselves, American Airlines and Continental Airlines has sparked opinions as to if it will go ahead, due to previous attempts falling flat.

There have been two previous attempts by British Airways and American Airlines to merge in the past that have been unsuccesful. The merger had attempted to create a bilateral allicance that covered schedules, revenue and transatlantic ticket pricing. This was not succesful however due to the airlines not being prepared to surrender runways slots at Heathrow Airport.

A merger is considered more likely this time however as the recent 'open skies' agreement has opened up competition for transatlantic operators. It is rumoured that penalties may have to be paid as well as the tie-up being unpopular with other airlines. According to Gert Zonneveld, who is an analyst with Panmure Gordon in London, Heathrow has changed since the last attempt was made by the airlines to merger, making the chances of success stronger.

Virgin Atlantic has voiced concerns about the possible merger and has asked for blocks to be made on the deal due to the dominance that they currently enjoy. It is believed that the three airlines could carry as much as 70% of traffic from Heathrow Airport if this deal goes ahead, something that will worry many airlines.

Published by: Jon Vickery