EU regulators question British Airways tie-up
The three-way tie-up between British Airways, American Airlines and Iberia has today been cast into doubt with the European commission set to look into potential competition issues. At a time when the airline industry is literally bleeding money, any further delays in the proposed tie-up could well push one or more of the three companies into further financial trouble.
It is no secret that British Airways has been looking to slash its cost base over the last 12 months and while there is still some way to go there have been positive moves. However, the UK unions appear determined to stand in the way of British Airways cost reduction programme and many people expect significant friction over the months and years to come. Despite the fact that British Airways has massive debts, has seen business volumes evaporate and is struggling to compete with low-cost competitors, it would appear that not everybody is convinced about the "sob story" being portrayed by the British Airways management.
Whatever happens between with regards to the British Airways, American Airlines and Iberia tie-up there is no doubt that the worldwide airline industry will be very different once the recession ends, compared to the one we saw before the worldwide economy turned down.
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