BA/AA announce new alliance

British Airways PLC
3 August 2001

BRITISH AIRWAYS AND AMERICAN AIRLINES ANNOUNCE NEW ALLIANCE AND FILE FOR
ANTITRUST IMMUNITY



London and Fort Worth, Texas, Friday, August 3, 2001: British Airways and
American Airlines today unveiled plans for a new alliance that would boost
competition, deliver significant benefits for international air travellers,
and move toward a level playing field with other global airline alliances.

The companies will file applications for antitrust immunity in the United
States and clearance for their proposals in the United Kingdom and with the
European Commission. Both airlines are eager to work with regulatory
authorities to gain the necessary approvals and help create a positive climate
for 'open skies' between the United States and United Kingdom, giving
passengers a far greater choice of carriers. In line with the competing
airline alliances, the new relationship would include a wide scale codesharing
agreement.

Key consumer benefits would include access to more destinations and more
convenient schedules, extending lower fares to a wider range of destinations,
flexibility and ease of transfer, a more attractive frequent flyer programme,
greater ticket interchangeability and new improved check-in and luggage
facilities.

Commenting on today's announcement, Rod Eddington, British Airways' Chief
Executive, and Don Carty, American Airlines' Chairman and Chief Executive,
said: 'We simply want to have the same commercial advantages and deliver the
same consumer benefits that rival airline alliances and their passengers
enjoy. Antitrust immunity and codesharing would put us on a level playing
field with other alliances and set the stage for a US-UK open skies
agreement.'

The new alliance includes a profit sharing arrangement covering nine
transatlantic routes between London and Boston, Chicago, Dallas/Fort Worth,
Los Angeles, Miami, New York, Raleigh/Durham, St. Louis and San Francisco.
Antitrust immunity and codesharing would allow British Airways and American
Airlines, and the larger oneworldTM alliance, to compete more effectively with
rival alliance networks.

                                     more

               British Airways and American Airlines Announce New Alliance...2

Since the beginning of the British Airways-American Airlines relationship in
1996, dramatic changes have taken place in the transatlantic aviation
marketplace. Competing alliances now enjoy varying degrees of antitrust
immunity and codesharing approvals that British Airways and American Airlines
have yet to obtain.

'We are eager to work with regulators to gain the appropriate approvals. All
parties should take notice of the dramatic changes in the transatlantic
marketplace over the last five years. Progress towards open skies and greater
alliance competition will benefit all passengers,' said Rod Eddington and Don
Carty.

                                     ends

August 3, 2001                                             088/AS/01



NOTES TO EDITORS:

For more detailed background and briefing resources, journalists are invited
to access a website dedicated to this announcement at 'http://
www.american-britishairways.com'.

British Airways will be hosting a conference call for financial analysts at
1700 BST that will be webcast on 'http://www.bashares.com'.

For further information please call:

Jeff Angel                 British Airways             020 8738 5100
Steve Double               British Airways             020 8738 5100
Andrew Silverman           British Airways             020 8738 5100
Tim Doke                   American Airlines           00 1 817 967 1577
Al Becker                  American Airlines           00 1 817 967 1577
Richard Hedges             American Airlines           020 8577 4712