US regulators delay BA-AA partnership plans
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British Airways’ (BA) hopes of securing an alliance with American Airlines (AA) were this weekend dealt a blow by American regulators just days after a proposed merger with Australian airline Qantas also collapsed, the UK’s Telegraph newspaper has reported.
BA has been ordered by the US Department of Transportation (DoT) to file more detailed information over its potential tie-up with AA, specifically relating to their global expansion ambitions, the impact on the US travel retail industry, and BA’s other merger plans. The demand, which analysts reportedly warned could delay any deal by several months, was delivered to BA and AA in a detailed filing by the DoT on Friday night, The Telegraph added.
Last week talks between BA and Qantas about a possible tie-up broke down over issues concerning BA’s pension deficit and the UK flag carrier’s merger discussions with Spanish carrier, Iberia.
In its report, the DoT acknowledged that submissions from Virgin Atlantic, Air France and US travel agents had influenced its decision to force BA to provide the extra data. The emergence of Air France and US travel agents in questioning the alliance is likely to add weight to Virgin’s long-held argument that a deal between BA and AA would constitute an unfair monopoly of trans-Atlantic routes. Since details of a possible alliance emerged, Sir Richard Branson, the Virgin founder, has furiously lobbied US regulators and politicians to oppose the deal.
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