BA in talks with US rivals, shares take off

Date: Thursday 01 May 2008

British Airways led the way in the FTSE 100 today after it said it was in talks with US rivals American Airlines and Continental Airlines.

“British Airways is exploring opportunities for co-operation with American Airlines and Continental Airlines,” the airline said in a statement last night, without giving any more details.

The discussions are thought to centre on the possibility of Continental joining the OneWorld Alliance, which currently comprises BA, American Airlines and eight other airlines.

The tie-up would help BA and the other airlines streamline costs by enabling them to set prices and schedules. The current talks are unlikely to involve the possibility of a merger, which would be difficult given laws blocking foreign ownership of US airlines.

The admittance of Continental would be a significant boost for OneWorld Alliance and a blow to its rival SkyTeam Alliance, which currently counts Continental as one of its members. It would also help American Airlines and Continental compete with US rivals Delta and Northwest, which co-operate with SkyTeam partner Air-France KLM.

Continental said earlier this week that it was considering alternatives to its membership of the SkyTeam alliance. Other OneWorld members include Japan Airlines and Australia’s Qantas.

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