British Airways, American tie-up should be blocked, says Virgin

British Airways is still discussing a more extensive partnership with its US ally and Iberia Lineas Aereas de Espana SA, it said today. An antitrust application may be filed in the US as soon as next week, the London-based Times newspaper said, citing "legal sources" it didn't identify.

"We would oppose this attempt to create an anti- competitive alliance," Paul Charles, a spokesman for London- based Virgin Atlantic, said by e-mail today. "It would form a dominant mega-power on trans-Atlantic air routes from two of the largest EU members, forcing up ticket prices for passengers and restricting choice."

British Airways said in April it was talking with AMR Corp's American, the world's largest carrier, and Continental Airlines Inc about "opportunities for cooperation." Continental chose to form an alliance with United Airlines last month.

London-based BA and American have failed in the past to win an exemption from US antitrust laws to work together more closely because they balked at a requirement to give up some slots at London Heathrow.

Slots at Heathrow, Europe's busiest airport, can sell for as much as 30 million pounds ($60 million) a pair. BA is the biggest holder of takeoff and landing rights at the terminal, and Virgin Atlantic, controlled by billionaire Richard Branson, is the third-biggest owner.

The "open skies" treaty between the US and the European Union has opened Heathrow to new competition since March 30. American's current arrangement to cooperate with British Airways on some travel excludes trans-Atlantic routes, the most lucrative for the UK airline.