American
Airlines, British Airways and Iberia on Wednesday officially launched their
antitrust-immune joint venture, laying out plans for new routes, optimized
departure schedules and coordinated frequent flyer programs.
After
receiving antitrust immunity in July, the carriers have been working to come to
market with the proposed benefits of their joint business. Among a slew of
announcements on Wednesday, each carrier plans to launch new routes in April
2011 as part of the joint business. American plans to begin service between New
York's John F. Kennedy International Airport and Budapest and between Chicago's
O'Hare International Airport and Helsinki, Iberia plans to launch Madrid-Los
Angeles service; and British Airways plans to begin service between London's
Heathrow Airport and San Diego.
"Connoisseurs
of the BA route network may know that this is the third time that we have
launched this particular route," British Airways CEO Willie Walsh said
during a press conference with his new joint business partners in London on
Wednesday. "I think this serves to highlight the benefits of the joint
business. The route did not deliver a profitable return for BA in isolation,
but we are entirely confident that by working with our colleagues, it
will."
In
addition to new destinations, the carriers announced plans to harmonize
schedules on the destinations they jointly serve, previously as competitors,
now as partners. "When we were competing against each other, many of our
transatlantic flights left at the same time," Walsh said. "Now that we're
working together, we can improve schedules to provide more choice from the
start of the summer 2011 season," noting schedule harmonization would be
evident at hubs in London, New York, Chicago and Miami.
Among
other immediate benefits, the airlines have enabled customers to earn miles on
each other's frequent flyer programs, even on flights where those benefits
previously did not exist.
"Historically,
prior to immunity and this business, if you rode on British Airways, for
example, from the U.S.—from Atlanta, Denver or anywhere—and you were an
AAdvantage member, you could not earn AAdvantage miles on a British Airways
flight—even if you wanted to," American Airlines chairman and CEO Gerard
Arpey said. "Today, any AAdvantage member in the United States that elects
to fly British airways or Iberia can now check the box and earn AAdvantage
miles across the North Atlantic."
The
carriers also expanded codeshare agreements to further link their networks,
with AA adding code to 322 British Airways and Iberia flights to 101 destinations,
BA placing its code to 2,063 American and Iberia flights serving 181
destinations and Iberia adding its code to 354 American and BA flights,
expanding its reach by 96 destinations.
British
Airways executive vice president for the Americas Simon Talling-Smith said many
of those codeshares already are live, particularly those in hub markets, while
the rest should take effect in the next month.
In
addition to changes like codeshares and frequent flyer reciprocity that already
are in effect, the carriers also are eyeing more changes to come. Among those,
airport collocation remains a goal, though opportunities may be limited at
capacity-controlled hubs. "Collocation would definitely benefit our
customers," Walsh said, "but regrettably there isn't unlimited space
at the major hub airports, so we will be making some changes and we will be
doing that over time." For example, the carriers are looking at moving
some flights between Terminal 5 and Terminal 3 at London Heathrow, while they
also are in discussions to examine collocation options at American's Terminal 8
at JFK airport.
"We
are in negotiations with the Port Authority of New York and New Jersey about
different concepts on how we might expand T8 sufficiently to be able to include
all of our Oneworld partners, potentially, or the majority of them,"
American Airlines vice president of New York Art Torno said. "We're still
in the early stages, and we hope to have those negotiations come to conclusion
some time next year."