BA and AA seek US approval

American Airlines and British Airways have formally sought US antitrust immunity for a new alliance, their second attempt at cementing their relationship in three years.

The application was lodged with the US Transportation Department late on Friday night and immunity would allow the pair to code and profit share.

BA's partnership with AA is wrapped up in complex negotiations for an "open skies" agreement to liberalize aviation between the United States and Britain.

A key issue will again be whether the airlines would give up any take-off and landing slots at London's Heathrow airport, the stumbling block for the applications failure in 1999.

Virgin Atlantic, which last time ran a high profile, "No way BA/AA" campaign and is expected to again oppose the tie-up.

The biggest

BA, Europe's largest airline, and AA, the largest airline in the world, argue that changes in the industry in recent years means there is now more competition to their One World alliance.

Since 1996, new competing alliances have emerged and Paris and Frankfurt have become rivals to Heathrow.

BA and AA argue that clearance was of "vital strategic importance" for them to compete with those alliances which have anti-trust immunity.

An alliance would also involve combining frequent flier programs, international routes and scheduling, marketing, pricing and cargo.

"The American/British Airways alliance will significantly improve consumer convenience and choice, produce operating efficiencies that will create greater value for passengers and shippers," the companies said in their application.