Key alliances
Qantas
Under the Joint Services Agreement (JSA) there is full strategic, tactical and operational cooperation between ourselves and Qantas on all flights that serve markets between the UK/continental Europe and Southeast Asia/Australia. This cooperation provides our customers with improved flight departure times, routings and value for money, and means we can offer the very best of customer service to all passengers. In June 2005, the Australian Competition and Consumer Commission extended permission for us to cooperate in this way for a further five years, valid from February 2005.
We continue to work with Qantas to coordinate sales and marketing activities worldwide. We share all costs and revenues on the JSA routes, providing both companies with an incentive to improve the joint business.
American Airlines
We currently codeshare with American Airlines on points behind and beyond our respective US and London gateways. We now place our code on more than 120 American Airlines routes, whilst American Airlines applies its code to more than 80 of our routes. However, we continue to compete with American Airlines on North Atlantic routes.
We have recently announced we are exploring opportunities for cooperation with American Airlines and Continental Airlines.
Iberia
Under the Joint Business Agreement (JBA), on the Heathrow-Madrid and Heathrow-Barcelona routes, our cooperation with Iberia provides customers with improved schedules and value for money. Together with Iberia, we codeshare on more than 30 domestic and international routings.
During 2007/08, we joined a Texas Pacific Group-led consortium which considered making an offer for the equity of Iberia. However, the consortium eventually decided not to make a formal offer. During the year, we increased our shareholding in Iberia from 9.95 per cent to 13.15 per cent.
Alliance and codeshare relationships
At March 31, 2008 the oneworld alliance included 10 airline members: British Airways, American Airlines, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, Malev, Qantas and Royal Jordanian. Aer Lingus left the alliance on April 1, 2007, although we have maintained our bilateral codeshare relationship with the airline.
The oneworld alliance offers a substantial package of customer benefits, including reciprocal reward and recognition programmes, common lounge access, smoother transfers, increased customer support and greater value.
In addition to the above activities, during 2007/08 we maintained codeshare relationships with oneworld members, Cathay Pacific, LAN, Malev, Japan Airlines and Finnair.
In terms of relationships outside the oneworld alliance, we have maintained codeshare relationships with bmi, Brussels Airlines and Flybe. The relationships with Flybe and bmi were formed during the year, following the sale of BA Connect and termination of the BMED franchise respectively. Additionally, Caribbean Airlines and TAAG place their code on our services to Port of Spain and Luanda.
Franchising
As at March 31, 2008, we operated with three franchise partner airlines: Loganair in the UK, Sun Air in Scandinavia and Comair in South Africa. These three carriers carried 2.3 million passengers during the year to 38 destinations (including 24 destinations not served by our own network) in the UK, continental Europe, and Africa. In addition to providing connecting passengers to our own mainline services, the franchisees pay a fee to us and also pay for any services we provide to them.
BMED and GB Airways also operated under franchises for part of the year, prior to the termination of our agreements with them. The latter arrangement was terminated on March 28, 2008 following easyJet’s acquisition of 100 per cent of the share capital of GB Airways.
In October 2007, Loganair announced that it will cease to be a British Airways franchise operator from October 2008. We expect to maintain a codeshare relationship with Loganair when the franchise ends.