BA, AA hopeful for transatlantic alliance

American CEO Arpey. photo by AP

If British Airways CEO Willie Walsh had his way, he might want you to overlook all of the recent media attention his airline has garnered, almost all of which paints a gloomy picture for BA's future. First BA posted a record loss, and now there's threat of a possibly crippling strike this summer during a period that Walsh has said British Airways faces "our greatest-ever challenge." The Sydney newspaper The Daily Telegraph has said that BA is 'close to collapse,' and while that might be stretching things a bit, it certainly does a good job of illustrating the dire straits that Walsh now finds his company in. More recently, at the IATA summit in Kuala Lampur (which forecasted that the worldwide airline industry would lose $9 billion in 2009) Walsh believed that "this is probably the most difficult period in the history or our industry and I think that's shown in the IATA figures." If Walsh is to be believed (and I don't think he's making this stuff up), British Airways is currently fighting for survival.

But amidst all of the negative news, Walsh is trying to sound upbeat about one at least one thing: the proposed transatlantic alliance with American Airlines, saying that their case is "stronger than ever": "This is about leveling the competitive playing field and we are confident our case has significant merit... We expect to get approval in the current calendar year, which will allow us then to proceed with the joint business by 2010." American CEO Gerard Arpey also said that "we are confident of a positive outcome on both sides of the Atlantic." Addressing the two previous times that AA and BA applied for transatlantic immunity but were rejected, Arpey said that "it is open playing field across the Atlantic now," in reference to last year's Open Skies agreement between the US and the EU. And both airlines have made the case that since their chief rivals already have a similar deal (Delta and Air France-KLM, United and Lufthansa), it's only fair that the same privileges be extended to American and BA, too.