AA-British Airways-Iberia Deal Done; New Routes Announced

The tie-up between British Airways, Iberia, and American is complete. The deal will allow the three airlines, along with carriers in their oneworld alliance, to offer more codeshare flights and reduce costs.

To mark the official closing of the deal, the trio announced four new routes:

• New York JFK to Budapest, Hungary (operated by American)
• Chicago to Helsinki, Finland (operated by American)
• London Heathrow to San Diego (operated by British Airways)
• Madrid to Los Angeles (operated by Iberia)

In a release, American listed a series of benefits consumers can expect in the near future:

• Greater access to a wider choice of fares
• Coordinated schedules on joint routes to provide customers with better flight choice and timings
• Online check in and boarding pass printing with either the airline operating the flight, or the one the ticket was booked through
• Integrated online flight information on all three airlines’ websites
• Increased opportunity to earn and redeem frequent flyer benefits on trans-Atlantic flights

The deal was over a decade in the making, and only became realistic with the passage of an open skies agreement in 2008, which loosened restrictions on transatlantic scheduling. Still, oneworld was forced to give up four slots at Heathrow as a way of minimizing what was perceived as a potential monopoly there. Competitors, including Virgin Atlantic, felt the trio should have given up more slots.

As with any large alliance, there is a risk of price inflation. With these three airlines no longer battling each other in the traditional sense, logic would suggest there’s less incentive to compete on prices. It will be worth watching over the next few months to see what effect, if any, the deal has on fares across the Atlantic.

Readers, do you think the deal will be good or bad for consumers?