BA and American Airlines file fresh application to codeshare

British Airways yesterday submitted a fresh application to be allowed to codeshare with American Airlines on hundreds of destinations across the two carriers' route networks.

The move stops well short of the two airline's previous attempts to gain antitrust immunity for a merger of their transatlantic services. But it would bring significant economic benefits for BA and American, the two biggest airlines in the OneWorld alliance.

The latest filing follows the collapse in January of attempts by BA and American to combine their transatlantic operations after they refused to agree to the concessions demanded by the US Department of Transportation.

The codeshare application, if approved, would enable BA to use its code on destinations in the US, Mexico, the Caribbean and Latin America served by American. The US carrier, meanwhile, would be allowed to puts its code on BA routes beyond Heathrow to other UK and Irish destinations and services to Continental Europe, Africa, the Middle East and Asia.

The codeshare application also covers the two airlines' services between the US and Glasgow and Manchester but it excludes their transatlantic routes to and from Heathrow.

A previous codeshare application was turned down by the US DoT in 1999 on competition grounds. However, BA said that on this occasion it was more optimistic of gaining approval.

Andrew Cahn, the director of regulatory and government affairs for BA, said: "Codeshare agreements are part of the aviation landscape nowadays and we are certain that this application raises no competition issues."

He pointed out that both Virgin Atlantic and bmi British Midland already had codeshare agreements with US partner airlines while the rival SkyTeam and Star airline alliances also operated codeshares. "This is an opportunity for the regulators to level the playing field," Mr Cahn said.

At present, BA and American only co-operate in areas such as purchasing and joint access to each other's frequent flyer programmes and airport lounges. The codeshare application covers about 200 destinations although Mr Cahn said BA and American would not codeshare on all of them.

The US DoT has 28 days to respond to the filing although this timetable could be extended if it decides it needs further information from the two airlines.

Mr Cahn said BA and American would love to be granted full antitrust immunity but he did not see that happening for at least two years and the two airlines were not planning any filing. He said a BA-AA merger would not happen until the European Commission used its new powers to negotiate an EU-wide agreement with the US to liberalise air services. "American remains our partner of choice but we don't see antitrust immunity as a realistic opportunity in the near future."