AA-BA: Take Three

American Airlines and British Airways today filed an application with the U.S. Department of Transportation for "certain codeshare services permitted under the current provisions of the U.S.-U.K. Air Services Agreement." Though the two airlines are not seeking antitrust immunity at this time, as they had twice in the past three years, it marks the third time the Oneworld alliance co-founders proposed further integration of their bilateral marketing pact developed in 1996.

The two carriers in January retracted a second application for antitrust immunity after regulators demanded they surrender 224 weekly slots at London Heathrow Airport (BTN, Jan, 25). AA and BA also failed in 1999 to obtain acceptable terms for antitrust immunity (BTN, Aug. 2, 1999).

"Recent developments make Open Skies with the United Kingdom in the near term unlikely and have prompted the carriers, in the interim, to deepen their relationship by seeking approval for more limited codesharing as explicitly authorized by the existing air services agreement," the two airlines said in a joint statement this morning. "American, British Airways and Oneworld face competition from several global airline alliances, all of which already enjoy regulatory approval for codeshare cooperation, and all of which already enjoy antitrust immunity among their core transatlantic partners. Approval of this application will help to level the competitive playing field."

The proposed codeshare flights would include BA service between New York and Manchester and from AA's U.K. gateways to Africa, Asia, Europe, Ireland and the Middle East. It also would include AA flights between Chicago O'Hare and both Glasgow and Manchester and from BA's U.S. gateways to the Caribbean, Mexico and Latin America. The two carriers pointed out that this newest application excludes transatlantic services to and from London.

Heavily restricted London Heathrow long has been a point of contention for U.S. and U.K. regulators seeking to hammer out an Open Skies agreement--now seemingly moot after a recent European Court of Justice ruling (BTNOnline, Nov. 5)--and other carriers barred from the airport under the current Bermuda II treaty.