US regulator gives tentative nod for British Airways and American Airlines alliance

The US Department of Transportation (DOT) gave its tentative approval to grant antitrust immunity to British Airways and American Airlines to form a global alliance.

"If the decision is made final, American and its "oneworld" alliance partners British Airways, Iberia Airlines, Finnair and Royal Jordanian Airlines would be able to more closely coordinate international operations in transatlantic markets," the DOT said in a pressrelease late Saturday.

The DOT found that granting antitrust immunity to the oneworld alliance would provide travellers and shippers with a variety of benefits, including lower fares on more routes, increased services, better schedules and reduced travel and connection times.

The department also said the proposed alliance would enhance competition around the world by creating competition with the existing Star Alliance and the SkyTeam alliance, which already have been granted immunity.

It however said that the final approval depended upon the alliance renouncing four daily pairs of Heathrow slots at the busy Heathrow airport in London. ''As a condition of approval, the Department is proposing in its show-cause order that the applicants make four pairs of slots available to competitors for new US-Heathrow service.

The BA-American tie-up their third attempt since the last decade, since previous two attempts in 1997 and 2002 were abandoned by the alliance after regulators had asked them to give up 16 daily takeoff and landing slots at Heathrow.