THE fight for the world’s most lucrative air route will heat up this week when America’s Delta Air Lines teams up with Air France to take on British Airways at Heathrow.

The pair are expected to announce their first-ever transatlantic flights from the London airport. Delta is likely to serve New York, Atlanta and one other American city, with Air France studying a Los Angeles service.

The two airlines, already part of the Skyteam alliance, have asked the American government for approval to share revenue and coordinate fares and schedules on all transatlantic routes. This arrangement could include America’s Northwest Airlines and Holland’s KLM, which are also part of Skyteam.

Competition has been restricted at Heathrow for 30 years. A treaty between Britain and the US stipulated that only four airlines – BA, Virgin, United and American – could fly to the US from Britain’s largest hub.

The restrictions will be scrapped from the end of March.

The liberalisation has triggered furious jockeying for Heathrow runway slots and terminal space.

Delta is understood to have secured slots from its partner, Air France, which will sacrifice some of its short-haul flights. Other US airlines are also trying to muscle in. Northwest is likely to start services to Detroit, and Continental is trying to secure slots for New York and Houston. In response, BA, headed by Wil-lie Walsh, has moved US flights from Gatwick to Heathrow.

Experts are divided as to whether the extra capacity will bring a reduction in fares. “The UK-US market is worth around £4 billion a year, and it is growing fast,” one analyst said.

“It has a high proportion of business-class travellers, and they subsidise economy fares. I doubt you will see a big reduction in economy prices. What BA fears most is business-class tickets going down.”

BA told analysts last week it was not unduly concerned about the extra competition. BA is to announce details of “Project Lauren” – its new flights from continental capitals to America – in late November or early December.

Industry sources said the new operation might not be branded as BA, with speculation mounting that it would be called “Speedbird” – the airline’s radio call sign. BA said yesterday it had not yet decided how the new operation would be branded.

The “airline within an airline” will start with two Boeing 757 aircraft from two European cities.

An organisation called Project Lauren has begun advertising online for suitable pilots. A source at BA confirmed this was for the proposed service.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts