The prospect of having to contend with high oil prices for a long time to come is precipitating mergers between airlines. The latest major merger is that between British Airways and Iberia, which would be joined by the American giant American Airlines. The new entity would comprise a British Airways-Iberia pairing based on the tried and tested Air France-KLM model. It would have a fleet of nearly 450 aircraft and a network of over 250 destinations. American Airlines would be added through a partnership agreement.
The trio has applied to benefit from the antitrust immunity granted by the American and European authorities for the operation of transatlantic routes. This application includes two other Oneworld partners, Finnair and Royal Jordanian. The three airlines will work together on routes between North America (United States, Mexico and Canada) and the European Union, including Switzerland and Norway. In terms of market share, the Oneworld alliance would retain its predominance at London Heathrow, Europe's most coveted airport hub.
According to a study by Virgin Atlantic and consultants CAPA, British Airways, American Airlines, Iberia and their partners Finnair and Royal Jordanian have 47 % of slots at Heathrow, followed by Star Alliance with 28 %, Skyteam with 6 % and Virgin Atlantic with 3 %.
