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. Last Updated: 07/27/2016

British Airways Calls U.S. Alliance Crucial

FORT WORTH, Texas -- British Airways is hoping to use its proposed alliance with American Airlines as a weapon in its increasingly ferocious battle with other European air carriers, officials and aviation experts said.


British Air executives in London were quoted as saying in Sunday's Fort Worth Star-Telegram that a deal with American could mean the difference between retaining its prominence in the commercial air industry and becoming an also-ran.


"If British Airways ... and the policy makers of this country ... want to have a global airline industry based in this country, it can only be achieved through an alliance with a strong partner from the United States," said British Airways chief executive Robert Ayling.


Other European carriers, led by Lufthansa and KLM Royal Dutch Airlines, have crafted alliances with U.S. carriers. Those deals, coupled with "open skies" treaties between the United States and 12 European states, are a threat to BA unless it acts to defend the lead it has built over its rivals.


"Without such an alliance, I fear that we British could lose our prominent position in the worldwide air transportation business, just as we have lost our prominent position in shipping and shipbuilding and in automobile production, and in so many other industries," Ayling said.


Open-skies treaty talks between the United States and Britain have been stalled for eight weeks. But with final approval of the British Air-American alliance expected from British competition authorities this week, the talks are expected to resume shortly.


"The battle that British Air is now gearing up to fight is for market supremacy ... in Europe," said John Ash, managing director of Global Aviation Associates, a Washington-based consulting firm.


Said Ayling: "We are relatively well positioned vis-?-vis our continental competitors. The difficulty we now face is that they are all going through processes of change: reorganization, transformation, re-engineering.''


European competitors are all cutting costs, he said.


"That's why we're making these changes now, while we're still strong and healthy,'' he said. "We don't want to wait until it's too late. History has not been kind to airlines who have waited too late to adapt to changing conditions in the marketplace."


For American Airlines, a proposed marketing alliance with British Airways would provide opportunities for growth in Europe, expanding its reach beyond the United States and Latin America.


Fliers would gain nonstop or one-stop service to nearly every major city on the planet from Dallas-Fort Worth International Airport as the airlines coordinated pricing and marketing systems.


Lufthansa's U.S. partner is United Airlines, KLM's is Northwest Airlines. Delta Air Lines has partnerships with SwissAir, Austrian Airlines and Belgium's Sabena Airlines.


?The French financial newspaper Les Echos said Monday that Air France and Continental Airlines are in the advanced stages of discussions on an alliance deal, Reuters reported.


The paper quoted Continental chairman Gordon Bethune as telling the U.S. publication Aviation Daily that the talks were in their final stages. Air France did not comment.


Les Echos said industry sources indicated that the French airline was talking to more than one airline about alliances, trying to find a good geographical spread to counter other airline alliances.