BRITISH AIRWAYS will not use last week’s open-skies deal to pursue its long-held ambition of a “virtual merger” with US partner American Airlines.

Willie Walsh, BA’s chief executive, told The Sunday Times that the open-skies deal between the EU and US did not make “a significant change” to the chances of BA and American winning regulatory approval for a deal.

The airlines have twice in the past applied for immunity from American and British competition laws for their combined transatlantic operations. If approved, they would be able to operate their two fleets as one, colluding on scheduling, capacity and prices.

But regulators on both sides of the Atlantic have steadfastly rejected the plan, saying it would create a dominant player on key business routes. The plan would only be cleared if BA surrendered a large number of its runway slots at Heathrow, according to competition authorities.

“We will of course investigate it, but we will not be applying on the strength of this,” Walsh said.

The inclusion of a get-out clause in the open-skies plan made it “a good deal for Britain”, he said. The UK will in theory be able to revoke US airlines’ traffic rights to Heathrow from 2010 unless America agrees to substantial liberalisation of its aviation market.

If that liberalisation is agreed, BA would consider starting internal flights in America, and on new international routes from US cities. “BA has the brand presence to do that,” said Walsh.

But experts have questioned the strength of the 2010 cut-off, saying it would be difficult for governments to stop airline services once they have begun.

“The US threatened to renounce UK traffic rights for years under the old deal because they though it was unfair, but it never happened,” one said.

Walsh said BA would “not be impacted at all” by the deal. The airline will move its Houston flights from Gatwick to Heathrow in time for the start of open skies on March 30 next year. Dallas and Atlanta services would follow, said Walsh.

Heathrow sources said US airlines would struggle to secure landing and take-off slots at Heathrow, as well as sufficient terminal capacity and aircraft stands.

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