American, British Airways try again on trans-Atlantic plan

American Airlines and British Airways for the third time are seeking government permission to combine their trans-Atlantic operations, along with those of Iberia, Finnair and Royal Jordanian.

They seek a U.S. Department of Transportation grant of antitrust immunity allowing them to share sensitive marketing data and to jointly allocate capacity and set prices on all their trans-Atlantic flights, the airlines said Thursday. Two previous efforts failed when they refused to give up hundreds of "slots" — time-specific landing and takeoff rights — at London's Heathrow Airport, Europe's busiest and most lucrative hub.

The difference this time, says American CEO Gerard Arpey, is that U.S.-Heathrow service no longer is limited to just American, BA, United and Virgin Atlantic. Those restrictions disappeared in March when a new "open skies" air services agreement took effect.

Since then, more than 20 new Heathrow-U.S. flights a day have been launched by carriers belonging to the Star and SkyTeam global airline alliances that compete with the BA- and American-led Oneworld alliance.

Arpey said in an interview that the chances of winning antitrust immunity now are "very good."

There's no longer "any logical or rational reasons for preventing American and British Airways and Iberia from competing on a level playing field with Star and SkyTeam," he said.

Still, opposition is guaranteed. Richard Branson, chairman of BA's chief rival, Virgin Atlantic, last week attacked the notion of immunity for American and BA.

Willie Walsh, BA's chief executive, said Branson's opposition is "no surprise."

"He's trotting out the same arguments he's made before. … On the one hand, he's saying consolidation is bad, but a few days earlier, he said he wants to acquire BMI (Britain's No. 3 carrier) to consolidate his position at Heathrow. … He forgets to mention that Virgin's 49% owned by Singapore Airlines and that he's active in investing in airlines in Australia and the United States."

Leaders of American's pilots union signaled their opposition Thursday.

American's relationship with the Allied Pilots Association is strained due to large management bonuses paid while pilots continue working under concessions agreed to in 2003.

The union warned Thursday that its contract does not allow American to earn revenue from flights flown by other carriers' pilots and that American will have to reach a new contract with its pilots before it can combine trans-Atlantic operations with other carriers.

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