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Delta And Air France In Talks With British Airways

Sun Oct 22, 2000 8:20 am

British Airways Plc has begun talks on a possible alliance with Air France and Delta Air Lines of the United States that could lead to the breakup of the UK carrier's Oneworld alliance, the Sunday Times said.

Separately, the Mail on Sunday said BA had held talks with British Prime Minister Tony Blair seeking support to revive plans for a deeper alliance with American Airlines .

Speculation over BA's next move has swirled since the failure in September of its planned merger with Dutch airline KLM , but a BA spokeswoman would only say that the company talked to different airlines all the time and declined comment on the reports.

"People are always putting different airlines together because the industry has said consolidation and alliances are going to happen," the spokeswoman added.

The Sunday Times said unnamed BA executives had confirmed the talks with the other two possible partners, which it said could lead to it switching allegiances away from its Oneworld partner American Airlines.

The paper said it was too early to talk about the chances of a merger with Air France, but said that both sides recognised such a move was possible.

The Mail said a meeting between Blair and BA Chief Executive Rod Eddington had taken place two weeks ago, quoting an unnamed BA source as saying the company had unfinished business with American to which it was returning.

BA tried to form a strong alliance with American last year but was thwarted when U.S. regulators denied the two airlines the anti-trust immunity needed to better co-ordinate their services.

In its first quarter results in August, BA posted a pre-tax profit of just eight million pounds -- down from 23 million a year ago amid a continuing glut of capacity across the North Atlantic, high fuel prices and competition from low-cost carriers.
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RE: Delta And Air France In Talks With British Airways

Sun Oct 22, 2000 8:23 am


What's going to happen to OneWorld??? Hope that they won't break up. Do you all think that Qantas will join BA if the deal goes through with Air France and Delta???

Boeing747 万岁!
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RE: Delta And Air France In Talks With British Airways

Sun Oct 22, 2000 8:34 am

the US Government won't let this happen if they didn't let AA/BA go through, they won't let BA/AF/DL go through, if anything AA will leave Oneworld to join Qualiflyer and AA has already stated in the near future it will join Qualiflyer. QF might do what BA does, but I have a tremendous feeling that American Airlines might buy a bigger share than British Airways has in Qantas since QF is one of AA's most important partners.I think QF will leave, if anything, I want SR/SN to join Oneworld since it is my favorite alliance along with my favorite airline,American.
Give me a break, I created this username when I was a kid...
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RE: Delta And Air France In Talks With British Airways

Sun Oct 22, 2000 8:43 am


Qantas has so many codeshare flights with AA and BA. Wonder what will happen to Qantas if BA and AA go at their on ways. Do you thing Qantas will follow AA or BA??? Not to mention that AA is your favourite and BA is mine. Just a thought...


Boeing747 万岁!
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RE: Delta And Air France In Talks With British Airways

Sun Oct 22, 2000 9:11 am

As Blink said, the US gov might be quite reluctant to let this "BA/DL/AF" go.
Maybe it could be arranged thanks to slots redistribution or left routes but this is a costly way.

Any way don't you think financial links between US companies might evolve in the next few years ?

The anti-trust law is as stringent in the US as it is in Europe, which is a constraint for any alliance.
For instance Star enjoys a very strong position between Germany and Scandinavia, but now reaches full monopoly between Ger and Austria, with Austrian.
A BA/AF alliance might also be difficult to handle and slots/frequencies might have to be left to Star or low fare airlines (competing on French/UK market).
Another difficulty I think: LON is 50 min away from CDG.

I think that without working in an airline at a senior management level it is very difficult to forecast what future alliances will be made of in the short term!
Wait and see!

Anyway I like Skyteam philosophy that aims at being closer to customers: only customer oriented alliances, like any supply chains in other sectors of the economy, will be able to gain confidence.

Rgds, and GO SKYTEAM !!!!!!!

RE: Delta And Air France In Talks With British Airways

Sun Oct 22, 2000 9:13 am

It is impossible for AA to buy a slice in QF which is bigger than BA's because BA owns 25% and Australian foreign ownership laws prohibit more than 49% of QANTAS being in the hands of foreigners, and hell will freeze over before the Australian government allows this law to be lifted.

Ever thought that maybe one of these days that QF might turn around and buy a slice in AA? Not totally out of the question.

Anyway, on this alliance talk. All airlines will stay in Oneworld. As with the BA/KL merger, it will all fall into a heap when it gets down to the nitty-gritty.
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QF Between BA And AA?

Sun Oct 22, 2000 9:25 am

Blink and Mr BA,

Regarding QF, I think they could afford to maintain agreements with each of them (BA and AA), still reaping full benefits of codeshares and so on.

Given that transpacific frequencies are expected to grow fast in the next decade, QF might have an enjoyable position anyway.

The alliance model may not be fully settled yet I think.

Whatever may happen I'm not specially affraid of AA (and BA) future since they invest a lot in (rear+front) cabin comfort !
(Never travelled with AA nor BA so I make no comment on this)

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RE: Delta And Air France In Talks With British Airways

Sun Oct 22, 2000 9:31 am

The way BA is going, it's beginning to look like a wallflower at a dance, crying out for any partner whilst rapidly looking less and less attractive.

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Phil B

Sun Oct 22, 2000 9:42 am

Dear Phil,

Cynical remark but not very far from what it seems now:
next time I will upgrade you to "respected user" grade.
By the way I have no "respected user", (what a funny stuff !!) but it doesn't mean I respect no one !!
OK it's not a joke forum....

But more seriously, things change fast, and BA is likely to play a major role in the next decade. Regarding executive pax, I will be interested to see the impact of recent investments on traffic to come.


RE: Delta And Air France In Talks With British Airways

Sun Oct 22, 2000 10:36 am

I would like to point out to all that BA/AF/DL is not the same as AA/BA.....and therefore has a much better chance of being approved.

Unlike AA, DL doesn't have Heathrow rights. That's the big problem with Oneworld....if AA/BA were to happen, they would own the U.S. to Heathrow service, probably the most lucrative routes in the world.

DL/BA doesn't have that problem. If BA/AF can find a way to work together, then BA/AF/DL actually has a pretty good chance of making it (after all, the EU is very interested in making sure that Lufthansa has some competition).
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Three Times

Sun Oct 22, 2000 6:12 pm


This would be the third time Air France and British Airways are in talks.

The first time was in 1997, when BA saw that Heathrow and Gatwick would face capacity limits. The airline was looking for an attractive airport in Europe, where there were expansion opportunities.
But Christian Blanc refused he feared what BA would do with Air France. At the time Air France had zero profit and BA made £600 million that year.

The second time was this year. The information was first published by the French economic newspaper 'Les Echos', well-known for the reliability of its information. And the airline were forced to admit that they have had some talks about a possible strategic alliance.

BA had even stated Delta Air Lines would be the best partner for them (because of the network specifications and hubs I would imagine).

Is this time the right one?

Best regards,
Alain Mengus

RE: Delta And Air France In Talks With British Airways

Sun Oct 22, 2000 11:54 pm

This is looking it would be a so good alliance. But don't you think that BA and AF together is a little bit too dangerous, more for AF, even if AF is bigger than BA. But this would make an unbeatable alliance.
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RE: Delta And Air France In Talks With British Airways

Mon Oct 23, 2000 12:35 am



It wasn't a totally cynical remark though. The big problem with shopping around for a major partner so publicly is that investors (particularly the institutions) become very wary the more the negotiations fail.

If I were on the BA board, I would look to develop One World into a seamless Alliance over a number of years whilst providing some first class inter European links connecting with Heathrow, Gatwick and Manchester.

By integrating the services of the European partners this would provide a natural set of gateways for long haul flights, east and west, would relieve the pressure on Heathrow and would not transgress any EU rules as far as I can see.

I would drop BRAL and other UK based partners and let them take their schedules with them into independence.

The other UK cities served by BA could then benefit from revamped Shuttles to the gateways and/or high speed rail links in which BA could buy an interest.

This would leave the other airports to develop their own direct services with airlines and BA would not then be able to raise their usual (and tedious) blocking objections aimed at diverting as much traffic as possible through Heathrow.

Long haul, the situation is more difficult because of rules of ownership/anti trust rules/bi-lateral agreements, but I would drop all objections to long haul services by competitors from the gateways and elsewhere in the UK, in return for an open skies policy worldwide AND a fleet integration regime with the partner airlines.

The actual product to be sold would be a first class cargo handling/delivery service to fill the hold and make every flight profitable, a top of the range class for the business traveller at less than premium prices and an excellent economy product at an affordable price to fill the seats down the back and establish the airline in the eyes of the travelling public as one that wants passengers, not just a certain group.

With a more integration, fleet size could be reduced, maintenance could be passed around the partners with each specialising in one or more types and ticketing/reservations could be streamlined.

All this would take time, money, negotiation and a great deal of convincing of governments, not to mention competitors, but it would be a positive move forward, rather than looking for another partner at the "shall we fly together" dance.
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RE: Delta And Air France In Talks With British Airways

Mon Oct 23, 2000 1:40 am

I don't think BA/AF/DL would face as many regulatory hurdles as AA/BA. DL has a very small presence in the UK compared to AA. DL is locked out of LHR, will soon only have one flight at MAN the same as AA, soon to be 5 flights at LGW (only 2 more than AA), but it lacks the huge presence of AA at LHR. They will only have a monopoly on one route - LGW - ATL. Three DL flights and two BA flights fly this route every day. I'm sure DL would drop one of their flights if it meant getting a deal with BA. Besides, BD has proposed flying to ATL too. This, compared to AA/BA which dominate a lot of routes out of London (DFW, for example.)

BA/AF is also different to LH/SK or LH/OS because there is actually a fair bit of competition between London and France. BD, EasyJet, soon to be spun off Go? and other fly the route in addition to Eurostar trains. That's a fair bit of competition. Yes, I'm sure some routes will have to be given up, but nothing huge. Also, BA is axing its ORY flights next year and I'm sure would love to transfer some of its other CDG (LGW, MAN) flights to AF.

DL would be a good partner for BA. It has some well laid out hubs in ATL and CVG. (as is AF's CDG Terminal 2 hub.) ATL is large no doubt about it, but I find it surprisingly efficient and organized considering its size. Compare this to say DTW or IAD. The only thing that DL would not bring to BA that AA could would be access to Latin America. This is being worked on though. AM is a solid Mexican partner and DL has good access to Central America and is rapidly growing in South America.

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