BA, AMR Start Atlantic Accord With New Routes, 2,700 Codeshares
By Steve Rothwell -
Oct 6, 2010 6:30 AM MT

We’ve been waiting for 14 years and it’s great news that we can now put our plans into action,” AMR Chief Executive Officer Gerard Arpey said at a press conference in London. Photographer: Harry Page/Bloomberg

British Airways Plc, American Airlines and Iberia Lineas Aereas de Espana SA of Spain began their trans-Atlantic alliance by sharing booking codes on more than 2,700 services and adding four new routes to their network.

British Airways and AMR Corp.’s American won antitrust approval for their part of the tie-up in July after similar plans were blocked by regulators in 1997 and 2001. The venture will give the Oneworld group allies control of almost 50 percent of U.S. flights at London Heathrow airport, Europe’s busiest in.

“We’ve been waiting for 14 years and it’s great news that we can now put our plans into action,” AMR Chief Executive Officer Gerard Arpey said today at a press conference in London. “Our revenue-sharing partnership will further boost Oneworld, and enable us to reduce costs and attract new business.”

The carriers announced four new services to begin in April, with flights to be introduced by American from New York JFK to Budapest and from Chicago to Helsinki, by British Airways from London to San Diego and by Iberia from Madrid to Los Angeles.

“Combined selling and scheduling means that we will able to operate routes that would not have been viable,” British Airways CEO Willie Walsh said at the press conference.

Central to the accord is the coordination of fares and timetables among the three airlines, with costs and revenue being shared on flights between the European Union, Switzerland and Norway and the U.S., Canada and Mexico.

‘One-Stop Shop’

The partnership amounts to a “one-stop shop” for trans- Atlantic travel, Walsh said, adding that while the in-cabin product won’t be completely harmonized, “we will look after you as if you are flying on one single entity.”

British Airways will add its code to 2,063 American and Iberia flights to 181 cities, with Iberia codesharing on 354 British Airways and AMR trips to 96 locations and American on 322 BA and Iberia flights to 101 destinations.

The companies say the pact will allow them to better compete with the SkyTeam grouping led by Air France-KLM Group and Delta Air Lines Inc. and the Star Alliance that includes Deutsche Lufthansa AG and United Continental Holdings Inc.’s United Airlines, both of which had already won immunity from antitrust regulators.

‘Single-Door Approach’

“This gives them a better single-door approach for the business market when corporate travel managers are coming to book flights, and it will increase competition in coach,” said Chris Tarry, an independent analyst who has followed the airline industry for almost three decades. “But in terms of the other alliances they’re playing catch-up rather than jumping ahead.”

Walsh said he sees no evidence to support concern about a possible double-dip recession, and that demand has “improved” from a year ago, albeit from a “very low base.” AMR’s Arpey said that the recovery remains “fragile.”

The event was also attended by Antonio Vazquez Romero, the chairman of Iberia, with which British Airways plans to merge by the end of this year.

To contact the reporter on this story: Steve Rothwell in London at srothwell@bloomberg.net.
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net.