Friday, September 12, 2008

Brandon To Spend Millions To Block BA/AA Deal

British Airways and American Airlines have been linked together as members of the OneWorld Alliance since 1998, when the OneWorld Alliance was originally created. Unlike most airline partnership agreements however, American Airlines and British Airways have had special restrictions on their partnership within OneWorld due to potential Anti-Trust violations enforced by the BAA at London’s Heathrow Airport for flights to/from The United States, specifically.

Because of said anti-trust restrictions, for the past decade, American and British Airways have not been allowed grant any of their perks to the opposite airline’s members for flights across the Atlantic to/from the United States. For example, if an American Airlines AAdvantage member were flying from Los Angeles to London on British Airways, he/she would earn NO miles in his/her AAdvantage account whatsoever. This follows suit for mileage redemption and elite benefits as well.

Following the recent US/EU OpenSkies Act that has significantly reduced government restriction on the Trans Atlantic market, American and British Airways have been fighting to have their restrictions lifted. American and British Airways have chosen the optimal time to fight these restrictions because the current trend in that market is lifting age-old government restrictions.

Founder and CEO or Virgin Atlantic Airways, Richard Branson, has said that he is prepared to spend millions of dollars to prevent the tie-up between American Airlines and British Airways.

If American Airlines and British Airways do in fact have their anti-trust restriction lifted and are allowed to be true program partners, thus allowing them to offer perks to eachothers members, create codeshare flights, and share internal pricing information; they will jointly share a dominating market share for the Trans Atlantic segment to/from London. The combined operation will offer the most frequent flight schedule, easiest use of frequent flyer miles, and will hypothetically be able to control the pricing for the entire industry crossing the Atlantic to/from London. Naturally, this will undoubtably be felt by Virgin Atlantic’s balance sheet.

Written By:

Alex Early
Founder & President
The Early Air Way, LLC

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