Chris Jasper/LONDON Paul Lewis/WASHINGTON DC
British Airways has confirmed that it has held talks with Northwest Airlines - US ally of KLM, with which BA is looking to merge - in a move which threatens the UK flag-carrier's relationship with existing ally American Airlines, its "co-leader" in the oneworld global alliance.
BA has so far failed to secure anti-trust immunity from the US Government for an alliance with American, leaving it open to the possibility of alternative tie-ups. American, for its part, already has an "immunised" transatlantic alliance with Swissair and Sabena, and is putting increased emphasis on this.
"Everyone knows we are talking to KLM about a possible combination of our business," says BA. "And KLM has an important link with Northwest Airlines, so of course we have to explore how that might fit into a combined BA/KLM, and indeed with our existing portfolio of allies." Northwest will not comment on the reported talks.
While BA says American remains its "main" US partner, a source at the carrier stresses that "the airline world is not one of monogamy", noting that BA is linked to America West and had a alliance with Canadian Airlines, while in Europe American is tied to several oneworld carriers, and, most importantly, to Swissair and Sabena.
The source suggests that an immunised alliance with a US carrier is now BA's top priority, rather than simply a deal with American, and that the UK Government has been briefed accordingly ahead of new UK-US bilateral talks next month. A BA/KLM merger could be decided by then, with the BA board agreeing last week to press on with the process. Washington says it would not grant anti-trust immunity for a BA/KLM-Northwest transatlantic tie-up - or a BA-American one - without a new "open skies" deal.
American chairman Don Carty says the prospect of European mergers is real, and will "have implications for us and for our alliance partnerships". But he adds that "even in the absence of the comprehensive deal we seek with BA, we are, from an alliance standpoint, well positioned in Europe".
Lufthansa vice president international relations Ulrich Schulte-Strathaus says a BA/KLM merger would "speed up the consolidation process within Europe", but that BA is "testing uncharted waters" and will pay a "high price" if it succeeds. He adds that a merger could entitle third countries to renegotiate bilaterals with the UK and Netherlands.
Source: Flight International
