British Airways (BA) has turned up the heat on regulators by warning that it could make another attempt to merge with American Airlines if a tie-up between KLM and Air France gets the green light.
The airline is concerned about fair treatment on the lucrative transatlantic market, having seen its past attempts to forge ties with American Airlines scuppered by United States regulators.
It is watching closely to see whether competition authorities allow KLM and Air France to hang on to all of their existing US alliances. Between them, they have commercial ties with Continental, Delta and Northwest.
When asked whether a deal with American could be back on the cards, a BA spokesperson said on Sunday: ”Is it something that we’d look at? I suppose it is.”
BA is keen to be at the forefront of consolidation, as traditional barriers to cross-border mergers begin to weaken.
The BA board flew to Spain last week to meet directors of Iberia, which chief executive Rod Eddington views as his partner of choice among Europe’s airlines for closer cooperation. BA has also established links with Swiss, taking over Swiss’s frequent-flier club and introducing the airline to the OneWorld alliance.
However, the American market remains a point of contention. BA is worried that KLM and Air France could form a five-strong network with their US partners, helping them to boost Amsterdam and Paris over London as the key European arrival hubs for American travellers.
BA and American Airlines are both members of the OneWorld airline alliance. But their past attempts to forge closer links have been blocked by the American authorities, which demanded that the two airlines give up dozens of their sought-after take-off slots at Heathrow.
A BA spokesperson said: ”Our priority at the moment is to focus on our core business. But we’re also keen to strengthen our bilateral relationships, particularly with our OneWorld partners.”
It emerged over the weekend that BA is scrapping more aircraft from its fleet at Gatwick. The airline has already axed the last five turboprop planes from its mainline fleet and is retiring five Boeing 737s by April.
A BA spokesperson said the reductions were part of a ”future size and shape” restructuring. He said that they would not lead to cuts in service but were part of an effort to intensify the use of remaining aircraft.
BA has admitted that its restructuring has fallen slightly behind schedule.
The airline said last week that it had failed to meet its September deadline of cutting 13 000 jobs.
The job cuts are part of a reorganisation due to finish in March, which is intended to bring about annual savings of £650-million. — Guardian Unlimited Â