American is back in BA's sights
British Airways may revive its merger talks with American Airlines if regulators approve the planned merger announced last week between Air France and Dutch carrier KLM.
BA executives believe that if the US Department of Transport is prepared to wave through the Franco-Dutch alliance it will have to re-examine the onerous conditions it imposed on BA and AA that eventually led to the collapse of their deal.
BA has twice before tried to forge a transatlantic alliance with American, the largest US carrier, but abandoned the attempts because the price demanded by US regulators for the anti-trust waivers needed to make the deals work was too high.
The second attempt was abandoned in January last year after the American authorities demanded that BA and AA surrender a total of 224 take-off and landing slots at Heathrow airport.
One senior BA source said: 'We will look very, very carefully at the conclusions the regulators come to. It does have implications for us. There must be equality of treatment. We would expect our case to be re-evaluated.'
Another source added: 'If they give the green light they would be giving BA and AA a giant bargaining counter. If the climate were to change in that way we would reconsider.'
The structure of international airline alliances means that approval of the merger between Air France and KLM would create a five-way transatlantic link-up between the two European carriers and the US airlines Delta, NorthWest and Continental. This would be a departure from the bilateral agreements around which international airline alliances have been built until now. BA believes this would create a group so powerful that it would seriously distort transatlantic competition.
BA is also likely to argue that the European Commission must demand KLM shed slots at its Schiphol base near Amsterdam if a deal is to be cleared, while the two airlines must be prevented from exploiting their joint position on routes where it is dominant.
Other airlines, such as Lufthansa of Germany, will also demand their 'pound of flesh' as part of the consulting process by regulators.
Budget carrier Easyjet has already threatened legal action against French authorities over allocation of slots at Orly. Spokesman Toby Nicol said: 'We are in favour of consolidation, but the price must be the handover of slots at Orly and Charles de Gaulle.'
BA executives believe that if the US Department of Transport is prepared to wave through the Franco-Dutch alliance it will have to re-examine the onerous conditions it imposed on BA and AA that eventually led to the collapse of their deal.
BA has twice before tried to forge a transatlantic alliance with American, the largest US carrier, but abandoned the attempts because the price demanded by US regulators for the anti-trust waivers needed to make the deals work was too high.
The second attempt was abandoned in January last year after the American authorities demanded that BA and AA surrender a total of 224 take-off and landing slots at Heathrow airport.
One senior BA source said: 'We will look very, very carefully at the conclusions the regulators come to. It does have implications for us. There must be equality of treatment. We would expect our case to be re-evaluated.'
Another source added: 'If they give the green light they would be giving BA and AA a giant bargaining counter. If the climate were to change in that way we would reconsider.'
The structure of international airline alliances means that approval of the merger between Air France and KLM would create a five-way transatlantic link-up between the two European carriers and the US airlines Delta, NorthWest and Continental. This would be a departure from the bilateral agreements around which international airline alliances have been built until now. BA believes this would create a group so powerful that it would seriously distort transatlantic competition.
BA is also likely to argue that the European Commission must demand KLM shed slots at its Schiphol base near Amsterdam if a deal is to be cleared, while the two airlines must be prevented from exploiting their joint position on routes where it is dominant.
Other airlines, such as Lufthansa of Germany, will also demand their 'pound of flesh' as part of the consulting process by regulators.
Budget carrier Easyjet has already threatened legal action against French authorities over allocation of slots at Orly. Spokesman Toby Nicol said: 'We are in favour of consolidation, but the price must be the handover of slots at Orly and Charles de Gaulle.'
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