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