BA and American Airlines merger unlikely to affect trade

A possible merger between British Airways and American Airlines is unlikely to have any immediate impact on the trade. The two airlines moved closer together on Saturday as the US Department of Transportation granted preliminary approval for them to set up an alliance which would allow them to collaborate on pricing and services on lucrative transatlantic routes. In return the airlines would be expected to give up pairs of take-off and landing slots between the US and Heathrow.

Advantage Travel Centres director of business travel Norman Gage predicted that a merger would be unlikely to make either airline keener to work with the trade, adding that it could be years before they managed to integrate business models.

He said any merger could help the airlines during future industrial disputes, adding: “If some of one of the airline’s staff goes on strike then consumers can fly with the other’s aircraft.” ABTA chairman John McEwan added: “In terms of financial viability it is clearly a good thing: they’ll get economies of scale and be able to cut their costs.” However, he urged the airlines to keep their prices competitive, even if they ended up with a stranglehold on a route.