New agreement signed

British Airways PLC
19 July 2002


NEW AGREEMENT SIGNED FOR JOINT WORKING

British Airways and Iberia Airlines today unveiled plans to deepen their
relationship in a move that will deliver significant benefits for international
air travellers and the two businesses.

The airlines, whose networks are complementary, have signed a commercial
agreement to work more closely across their global networks including the UK and
Spanish markets, where they face vigorous competition from the full service,
no-frills and charter carriers.

When fully developed and implemented, the new deal will enable the airlines to:

  • Develop improved frequent flyer programmes and services
  • Share airport facilities to improve transfer services at Madrid, Barcelona
    and London
  • Extend code-sharing services
  • Coordinate sales and marketing programmes
  • Undertake joint network planning and coordinate capacity and pricing
  • Coordinate cargo services

Key consumer benefits will include access to more destinations and more
convenient schedules, extending lower fares to a wider range of destinations, a
more attractive frequent flyer programme and new improved check-in and luggage
facilities.

The airlines, which have seen their revenues fall dramatically following the
events of September 11, are seeking to improve their network services and
overall efficiency through the deal. By improving their cost structures they
will be able to serve a wider range of destinations more effectively.

British Airways' Chief Executive, Rod Eddington, and Iberia's Chairman, Xabier
de Irala, said: 'Our proposal for closer cooperation is a competitive response
to the changing and challenging market environment and marks a step forward in
our efforts to progress consolidation in Europe.

'It will enable us to improve our cost structure, create a network that can
compete with increasingly integrated alliances and serve a wider network for our
customers.'


                                      ends

19 July, 2002 078/LE/02



Notes to editors;

  • British Airways' franchise partner, GB Airways, will also sign a
    commercial agreement to cover its relationship with Iberia and British
    Airways. The three will make a filing to the European Commission for
    exemption from Article 81 (3) of the European Treaty.

  • British Airways and Iberia first began working together in 1999 with a
    code-sharing deal covering domestic UK and Spanish destinations. Today, as
    well as developing sales representation for each other in 27 countries
    worldwide, the two carriers codeshare on 39 routes.

  • As part of their oneworld co-operation, British Airways and Iberia have
    also established joint check-in, ticketing, lounges and handling in 24
    cities, mostly in Europe and South America.

  • In March 2000, British Airways completed its acquisition of a 9% stake in
    Iberia. The airline has two directors on Iberia's board.




                      This information is provided by RNS
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