BA close to applying for American immunity

By John Bowker and Jui Chakravorty

LONDON (Reuters) - British Airways (BAY.L) is confident it can lodge an application in the United States to seek antitrust immunity for an alliance with American Airlines (AMR.N) next week, a source familiar with the matter said.

The source said talks between the two airlines about the alliance were still continuing on Friday but it was hoped they would soon reach a positive conclusion.

Spanish carrier Iberia (IBLA.MC), in merger talks with BA, is also part of the discussions, the source added.

A spokesperson for American Airlines said it "continues to have conversations" with British Airways regarding an alliance, but a decision had yet to be made.

British Airways declined to comment, although Chief Executive Willie Walsh was quoted last week as saying the airline expected to make an announcement about the deal one way or another in the next fortnight.

The British carrier first said it was talking to its United States counterpart in April.

The three airlines are seeking to agree an alliance which would allow revenue sharing on transatlantic routes.

American and BA have tried and failed to gain antitrust immunity twice before, but are now likely to tell U.S. regulators the competitive landscape has been changed by the "open skies" agreement.