WHAT THE MEDIA SAY: BA/AA plan to ally fuels rival attack

Organisation: British Airways - Issue: American Airlines

British Airways and American Airlines' plans for a profit-sharing,

transatlantic alliance surfaced for the second time last weekend - two

days before BA announced a drop in first-quarter operating profits -

with a 'horrible sense of deja vu' (The Independent 5/8).

The news immediately re-ignited the bitter rivalry between Europe's

largest airline and Virgin boss, Sir Richard Branson.

In a story largely ignored by the tabloids, much was made of the

previous bid for a joint venture which crash-landed when the former BA

chief Bob Ayling failed to reach agreement with the regulators on both

sides of the Atlantic.

Rod Eddington is now chief executive and his view, together with his

American counterpart Don Carty, that the marketplace is very different

to what it was five years ago underlined the airlines' confidence that

this time the deal would be successful and passengers would benefit from

lower fares.

Their joint statement was widely reported and making themselves - and

their executives - available for conference calls with reporters added

grist to their mill.

News of the application for anti-trust immunity by the two airlines was

enough to make Branson cut short his holiday in the Caribbean to voice

his strong opposition to the plan, on the grounds that it was 'grossly

anti-competitive' (Ananova 6/8).

Branson immediately announced a £10m advertising campaign against

his old rivals and his statement that Virgin would fight the venture

'tooth and nail' provided the media with the quote it wanted.

Analysts and headline writers, however, did not agree with Branson's

statement that the alliance will be given 'the short shrift it

deserves', with most considering that the two airlines' flight path to a

deal for nine key routes may be cleared for take off.

The American online coverage mostly played it straight with negligible

commentary but the UK media pronounced: 'This time BA could land its

American Dream' (money.telegraph 4/8). The Guardian (4/8) agreed: 'It

might just fly'.

Travellers were warned not to fasten the seatbelts just yet though as

this 'continues to be the longhaul flight to beat them all' (The

Independent 4/8).

Analysis and commentary by Echo Research. More information can be found

at: www.echoResearch.com.

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