British Airways and American Airlines are Go to Collude on Prices and Routes
Another week, another round of shakeups at British Airways. Last week it was their merger with Iberia. Before that it was their new non-union crew. Now it's the news that their 14-year quest to expand their trans-Atlantic alliance with American Airlines has finally been approved by US and EU regulators. The new American/British Airways/Iberia arrangement allows them to effectively function as a single company: setting prices, selling tickets, and scheduling routes.
Where you fall on this deal depends on where you are in the airline industry. If you're part of the oneworld alliance, you see the much-sought approval as only fair. Lufthansa/United and Air France/Delta basically have the same setup under the umbrellas of Star Alliance and SkyTeam, respectively. But if you're not part of any major alliance and/or Heathrow is part of your personal global airline empire, this is exactly the kind of decision that would ruin your weekend. Cue Richard Branson: "millions of passengers...will suffer the consequences of this monster monopoly."
He's definitely right that the deal will decrease routes and increase prices. Whether the new sort-of merger will become the industry-shaking anti-competitive disaster he's predicting is still an open question.
It's actually been a good couple of days for oneworld across the board, with British Airways sponsoring the entrance of Air Berlin into the alliance. Eventually the new arrangement will include codeshares with American and Finnair, and in the meantime it will help all oneworld customers better reach the 134 destinations that the German LCC currently serves. So if you have a lot of oneworld miles banked and were looking to fly nonstop from LA or NY to Dusseldorf, your options just got that much better.
No word yet on what role, if any, Air Berlin's own Deltalina had in helping to secure the deal.
[Photo: James Wang, Wiki Commons]
· American Air, British Airways Alliance Wins Final U.S. Approval [Bloomberg]
· Airline News [Jaunted]
· Airline Mergers [Jaunted]