11 August 2008

British Airways and American Airlines 'close to merger'

Major airlines British Airways (BA) and American Airlines (AA) are said to be close to striking a deal over a possible merger. BA is making a third attempt to join forces with its USA partner despite being twice turned away by officials in the US due to competition laws. It tried both in 1997 and 2002 to strike up a similar deal with AA but previously had its offer rejected. Willie Walsh, BA's chief executive, said that his firm "want to move on this as soon as possible" which would see the airlines operating transatlantic flights as a single company.Rival airlines, including Virgin Atlantic, are against the deal which they fear would be anti-competitive. Virgin spokesman Paul Charles said: "It would form a dominant mega-power on trans-Atlantic air routes from two of the largest EU members, forcing up ticket prices for passengers and restricting choice."BA is also looking to close a merger with Spanish carrier Iberia.

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