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Tuesday, Sep. 22, 1998
3 join American, British Airways alliance
Virgin Atlantic warns merger will raise prices
By DIRK BEVERIDGE
Associated PressLONDON - American Airlines and British Airways teamed up Monday with three partners in the industry's second super alliance, saying they will be able to fly virtually anywhere in the world.
The alliance also includes Canadian Airlines, Australia's Qantas and Hong Kong's Cathay Pacific Airways - and they hope to expand soon with partners from continental Europe and Japan.
The airlines say their venture, called ``oneworld,'' will be a tough competitor to the Star Alliance put together by United Airlines and Germany's Lufthansa.
But one rival warned that passengers may end up paying too much as competition dries up on some routes.
Billionaire Richard Branson, who runs Virgin Atlantic Airways, said the oneworld group will stifle competition on flights between Britain and Australia or London and Hong Kong.
Virgin said it controls 16 percent of the traffic between London and Hong Kong while British Airways and Cathay Pacific have the other 84 percent.
``For `oneworld,' read one company, one monopoly and millions of passengers taken for a ride,'' Branson said in a statement.
Canadian Airlines and Australia's Qantas already had marketing partnerships with American and British Airways - and Cathay Pacific came aboard Monday.
Executives told a news conference that they had invited the Spanish flag carrier Iberia to join up. Finnair president Antti Potila said later his company was negotiating to get into the group.
The executives also have their eyes set on a bigger prize: Japan Airlines.
``It's really up to the Japanese to make their decision on that,'' said Don Carty, the chief executive at American. Asked about getting a Latin American partner, Carty said this, too, was a possibility although he said American already has an extensive route network in the region.
Oneworld was launched even as American and British Airways continue their fight to gain regulatory approval for a separate deal that would give them U.S. antitrust immunity to set prices on routes across the Atlantic.
The new alliance is ``not a substitute,'' said Bob Ayling, chief executive at British Airways.
The alliance is a first for Cathay Pacific, which said its associate carrier Dragonair, serving some destinations in China, might also join after setting up a frequent flyer program and making other necessary changes.
The airlines say they will coordinate their flight schedules and ticketing, while cooperating on their frequent flier programs to better serve customers beginning early next year.
Alliances are becoming increasingly common in the international aviation industry, where travel is booming, but leading airlines realized long ago it wouldn't be feasible to get big enough to cover the entire globe single-handedly.
The creation of oneworld gives the industry two big global alliances, although there are many smaller ones such as the deal between Northwest Airlines and KLM Royal Dutch Airlines.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web