British Airways In Talks With American, Continental

[WingNaPrayer]

LONDON -(Dow Jones)- British Airways PLC (BAIRY) said Wednesday it is exploring opportunities to cooperate with AMR Corp.'s (AMR) American Airlines and Continental Airlines Inc. (CAL), in talks that are potentially seen leading to Continental joining BA and American's oneworld marketing alliance.

A BA spokesman said he couldn't comment on the nature of the discussions. The U.K. airline already has strong ties with American. Previous efforts by the two airlines to form a transatlantic joint venture were put on hold after being hindered by U.S. and European regulators.

Continental, meanwhile, ended talks with United Airlines parent UAL Corp. ( UAUA) on Sunday about a potential merger. It is currently a member of the SkyTeam alliance, which competes against the 10 airlines comprising oneworld.

Airlines across the world are looking to consolidate, to bolster their businesses amid soaring fuel prices and a softening world economy. Partnerships through global alliances are subject to less regulatory scrutiny than outright mergers, while allowing airlines to share passengers and expand their geographic reach.

Houston-based Continental is considered attractive to potential partners for its seasoned management team and strong service record, as well as for its hubs in Newark, New Jersey, and Houston serving Europe and Latin America.

American Airlines couldn't be reached for comment, while Continental representatives declined to comment.

Full Story/Source

 

[NewHampshire Black Bears]

The Importance of POWERFUL friends must NEVER be underestimated !!!!!!!!!


I've often said, that the ULTIMATE in a merger/Acquisition would be AA/BA..and AA/JL.
With a deal like that, you would NEVER have to worry about what the other guys were doing

 

[Maark767]

The Importance of POWERFUL friends must NEVER be underestimated !!!!!!!!!


I've often said, that the ULTIMATE in a merger/Acquisition would be AA/BA..and AA/JL.
With a deal like that, you would NEVER have to worry about what the other guys were doing

AA does some things right, a BA/AA alliance would be second to none. DL and NW ??? No problem...

 

[ual777fan]

AA does some things right, a BA/AA alliance would be second to none. DL and NW ??? No problem...

The only downside to such a deal is the Heathrow itself. T3 is a total mess and BAA has to be amongst the most incompetent airport operators in the world.

 

[Bagbelt]

I think the whole merger frenzy will be the next gimmick du jour. The problem was, is and will be that instead of going out of business and cutting capacity failing concerns are allowed to continue indefinitly. And even if majors cut capacity, the startups of the world continue to throw a wrench in anyones plans to restore some pricing discipline. All the majors allready belong to alliances, what would shuffling the deck accomplish? American has lots of TWA routes that have sat idle for years. Delta picked up a worldwide icon with PanAm. Did getting bigger through mergers with international presence change anything then? Why would it now?

 

[Barfbag]

I think the whole merger frenzy will be the next gimmick du jour. The problem was, is and will be that instead of going out of business and cutting capacity failing concerns are allowed to continue indefinitly. And even if majors cut capacity, the startups of the world continue to throw a wrench in anyones plans to restore some pricing discipline. All the majors allready belong to alliances, what would shuffling the deck accomplish? American has lots of TWA routes that have sat idle for years. Delta picked up a worldwide icon with PanAm. Did getting bigger through mergers with international presence change anything then? Why would it now?

True; some have TWA routes still sit idle, but as AA begins to unwrap some of these of late, BCN, MSP and Moscow AA/TWA's battered merger of this forum, begins to make sense after all. Even a merger opponent the likes of Bob Crandal should see some long term benefits.

CAL, is the gem in the rough here.

AA and BA should be thankful to have CAL in their fold, they can learn much from the smaller, and more agile carrier. CAL brings back a sense of class, long forgotten in our industry. CAL is like a petri dish in the lab, BA and AA can watch as students and learn. They can only add, not take away.

With BA/AA vast resources CAL is only get better, everyone wins here.

 

[Hi-C-Camp]

True; some have TWA routes still sit idle, but as AA begins to unwrap some of these of late, BCN, MSP and Moscow AA/TWA's battered merger of this forum, begins to make sense after all. Even a merger opponent the likes of Bob Crandal should see some long term benefits.

CAL, is the gem in the rough here.

AA and BA should be thankful to have CAL in their fold, they can learn much from the smaller, and more agile carrier. CAL brings back a sense of class, long forgotten in our industry. CAL is like a petri dish in the lab, BA and AA can watch as students and learn. They can only add, not take away.

With BA/AA vast resources CAL is only get better, everyone wins here.

Its not a bad situation, Only, your a little behind - Look at AF/KLM - NWA --- That took place awhile ago... It's a code-share people not a merger... CAL would be smart to team up with someone that could give it more passengers from other areas it doesn't already serve as much, such as the west and mountain areas, AMR will not crossfeed that many people for them and vice versa... Not very smart if you ask me, but OneWorld does kinda need CAL, they are by far the most lacking alliance there is..

 

[FrugalFlyerv2.0]

Its not a bad situation, Only, your a little behind - Look at AF/KLM - NWA --- That took place awhile ago... It's a code-share people not a merger... CAL would be smart to team up with someone that could give it more passengers from other areas it doesn't already serve as much, such as the west and mountain areas, AMR will not crossfeed that many people for them and vice versa... Not very smart if you ask me, but OneWorld does kinda need CAL, they are by far the most lacking alliance there is..

I kind of agree that 1-world does benefit if CO joins. Although over-rated CO is a good airline. While * accepts more or less anybody into their alliance 1-world has for the most part been somewhat more exclusive ... ... ... until Malev and Royal Jordanian joined. But I digress.

Will AA be able to freely code-share with CO? I recall that APA threw a temper tantrum back in the day when CP was codesharing with AA.

 

[ual777fan]

I kind of agree that 1-world does benefit if CO joins. Although over-rated CO is a good airline. While * accepts more or less anybody into their alliance 1-world has for the most part been somewhat more exclusive ... ... ... until Malev and Royal Jordanian joined. But I digress.

Will AA be able to freely code-share with CO? I recall that APA threw a temper tantrum back in the day when CP was codesharing with AA.

And they are throwing a temper tantrum right now during contract negotiations about AA's codesharing with Cathay, JAL and Qantas. Someone needs to clue that union into the reality that codeshares are here to stay regardless of what they do. Just because AA metal can physically fly the routes, that doesn't mean that it makes a damn bit of sense from the financial side (see... UA/NW domination of the Pacific and how AA loads between 10-15 points lighter than UA at ORD on TPAC routes they compete on).

 

[WingNaPrayer]

FOCUS: BA, AA, Continental Plans May Hinge On Heathrow


LONDON -(Dow Jones)- The success of any move by British Airways PLC (BAIRY), AMR Corp.'s (AMR) American Airlines and Continental Airlines Inc. (CAL) to forge closer ties will be closely linked to how regulators view their market power at London's Heathrow Airport.

Two previous attempts by BA and AA to establish a bilateral alliance covering transatlantic ticket pricing, schedules and revenue were largely scuppered as they refused to give up the required number of prized runway slots at Heathrow that regulators wanted. A deal this time round could be more likely, however, as the London airport was recently opened up to more transatlantic competition through the 'open skies' pact, but penalties still are likely, according to analysts. Any proposed tie-up would also face protests from rival carriers.

BA late Wednesday said it is exploring opportunities for cooperation with oneworld alliance partner American Airlines and Continental. Talks appear to be at an early stage and BA hasn't said if it plans to seek antitrust immunity for any agreement. The talks could mean that Continental ultimately leaves the SkyTeam airline marketing alliance that it's a member of.

Gert Zonneveld, an analyst with Panmure Gordon in London, said the market position at Heathrow has changed since BA and AA dropped their last attempt to form a joint venture back in 2002. "We have 'open skies.' There are slots available," he said.

Under an aviation treaty known as 'open skies,' European airlines since the end of March have been able to fly from any European airport to any point in the U.S. and vice versa for American carriers. Effectively, this has opened up Heathrow to competition although its two runways are operating close to capacity. Previously only BA and Virgin Atlantic Airways Ltd. on the U.K. side and American Airlines and United Airlines on the U.S. side were allowed to fly to the U.S. from the airport.

Investment bank Dresdner Kleinwort said it believes BA should stand a better chance of achieving antitrust immunity now, given the increased competition among airlines on the transatlantic following the recent deregulation.

FULL STORY


I don't think there is enough aspirin in the whole of the universe to deal with this mess!

 

[FWAAA]

I was impressed by the comments by Arpey and Horton about AA's and BA's LHR dominance during the conference call a couple weeks ago; Despite all the bleating about how BA/AA had to divest slots to the underprivileged as a condition of their previous antitrust applications, AA felt vindicated as competitors purchased slots the past few months to gain access. As Arpey said (paraphrasing here) "We bought our way into Heathrow - and our competition has been successful in buying their way into Heathrow, too." AA spent hundreds of millions many years ago to get TWA's Heathrow rights and slots and now CO, NW, US and DL have been able to do the same thing, all without requiring that BA/AA give up some of their slots.

 

[FrugalFlyerv2.0]

Two previous attempts by BA and AA to establish a bilateral alliance covering transatlantic ticket pricing, schedules and revenue were largely scuppered as they refused to give up the required number of prized runway slots at Heathrow that regulators wanted. A deal this time round could be more likely, however, as the London airport was recently opened up to more transatlantic competition through the 'open skies' pact, but penalties still are likely, according to analysts. Any proposed tie-up would also face protests from rival carriers.

I curious to see/hear how many LHR slots AA/BA would be forced to i) surrender and ii) the BS reason(s)?

 

[Barfbag]

Its not a bad situation, Only, your a little behind - Look at AF/KLM - NWA --- That took place awhile ago... It's a code-share people not a merger..

True again; but AF/KLM- NWA clashed in culture from the start, you had the Euros vs. US mentality.

AF is the Euro version of Frank Lorenzo, look at what Alitalia was offered recently.

The Brits are just slower Americans, AA is well disciplined at HQ, but loses it in the trenches. CAL seems to have found a nitch doing both well.



Finally, it's better to have CAL at the table, where we can look over their shoulders from time to time.

 

[aafsc]

True; some have TWA routes still sit idle, but as AA begins to unwrap some of these of late, BCN, MSP and Moscow AA/TWA's battered merger of this forum, begins to make sense after all. Even a merger opponent the likes of Bob Crandal should see some long term benefits.

CAL, is the gem in the rough here.

AA and BA should be thankful to have CAL in their fold, they can learn much from the smaller, and more agile carrier. CAL brings back a sense of class, long forgotten in our industry. CAL is like a petri dish in the lab, BA and AA can watch as students and learn. They can only add, not take away.

With BA/AA vast resources CAL is only get better, everyone wins here.

Wrong! The AA/TWA deal does not, has not, will not, or ever "make sense after all". Prior to the signing of the recent EU/US open skies treaty, most European countries had open skies with the US on an individual basis. So AA could have just as easily flown to BCN, MXP, etc. even without the purchase of TWA's assets. Also, AA has always held the ORD-Moscow route authority, they did not get it from TWA. The only TWA destinations that would require a route authority would be most places in the Middle East; AA has shown absolutely no interest in flying it's own metal there. AA could have flown it's current STL schedule with it's own metal, it did not need TWA's. The only small item of value TWA brought to AA was some gates and slots in DCA and NYC; which AA could have had very easily if TWA had stopped flying altogether. It wasn't worth the price AA paid (cash, assumption of liabilities, integration costs, bringing the TWAers to top scales, and the seniority headache).

 

[Maark767]

Wrong! The AA/TWA deal does not, has not, will not, or ever "make sense after all". Prior to the signing of the recent EU/US open skies treaty, most European countries had open skies with the US on an individual basis. So AA could have just as easily flown to BCN, MXP, etc. even without the purchase of TWA's assets. Also, AA has always held the ORD-Moscow route authority, they did not get it from TWA. The only TWA destinations that would require a route authority would be most places in the Middle East; AA has shown absolutely no interest in flying it's own metal there. AA could have flown it's current STL schedule with it's own metal, it did not need TWA's. The only small item of value TWA brought to AA was some gates and slots in DCA and NYC; which AA could have had very easily if TWA had stopped flying altogether. It wasn't worth the price AA paid (cash, assumption of liabilities, integration costs, bringing the TWAers to top scales, and the seniority headache).

So well said and all your facts are so true.....