BA and Iberia to extend flight partnership

British Airways and Iberia, the recently privatised Spanish national airline in which BA holds a nine per cent equity stake, have notified the European competition authorities of their plans to deepen their alliance on short and long haul flights.

BA said that the two airlines, which are the leading European members of the eight-strong Oneworld alliance, expected to cut costs and improve services.

The UK group is seeking to strengthen its bilateral links with all the Oneworld members and has informed the European Commission of its plans to forge closer commercial links with Finnair and Aer Lingus as it tries to counter growing competition from the rival Star and SkyTeam alliances and to reduce its losses on short haul services in Europe.

BA and Iberia said that they would code share, or sell seats on each other’s flights, much more widely across their networks.

The companies will develop joint schedules across the south Atlantic with joint fares and close liaison in sales and marketing.

Competition in Europe is increasingly being fought between the rival alliances with BA and Iberia facing a tough challenge from the joint venture formed by the Star members Lufthansa, BMI British Midland and SAS Scandinavian Airlines.

Xabier Irala, Iberia chief executive, said the two airlines wanted “to move forward quickly to secure improved services and further efficiencies through wider and deeper co-operation.” BA and Iberia signed their first co-operative agreement in February 1999.

The two carriers are likely to face competition concerns from Brussels because of their dominant positions on the main routes between the UK and Spain, although the risk of opposition has been reduced by the entry of new competitors.

BMI British Midland has begun services from London Heathrow to Madrid and Barcelona and the low cost carriers EasyJet, Go and Buzz serve several destinations in Spain from London Luton and Stansted airports.