PLANS TO DEEPEN ALLIANCE WITH IBERIA

London, Friday, May 4, 2001: British Airways and Iberia today notified the European Union of their plans to deepen their co-operation.

The partners want to work together across the South Atlantic in areas including:

* Code-sharing more widely across one another’s networks, including on parallel services between Europe and Latin America.

* Developing flying schedules jointly across the South Atlantic.

* Establishing joint fare products for these routes.

* Liaising closely on sales activities, including offering common deals.

For consumers, this will mean the two carriers can offer one-stop flight shopping covering a far wider choice of flights between the two continents, serving more destinations, and greater ticket interchangeability, giving more flexibility.

By working together, the two airlines expect to save costs, which can be passed on to customers in the form of better services and good value fares.

Through their membership of the oneworld global alliance, they already offer full frequent flyer programme reciprocity and offer top tier frequent flyers access to one another’s lounges, with priority check-in and boarding privileges.

Iberia is the leading European airline across the Southern Atlantic, serving 21 destinations in the region, 14 of them with daily frequencies, with a total of 77 flights a week from Madrid.

British Airways operates 23 flights a week between London and the eight destinations it serves in six Latin American countries.

The two airlines already code-sharing widely - on 33 shorthaul routes between the UK and Spain and behind and beyond their UK and Spanish gateways. On Tuesday, code-sharing was extended to longhaul routes for the first time, with the IB code going on British Airways flights to Bangkok, and the BA code on Iberia services to Lima, Peru.

Rod Eddington, British Airways’ Chief Executive, said: “Our alliance with Iberia is already bringing substantial benefits to both companies and our customers. We provide even better service and facilities for our customers and reduce costs by working together than we can separately. It really is a case of the whole being greater than the two parts.”

Xabier de Irala, Iberia’s Chairman, said: “We value British Airways as a partner and we now want to move forward quickly to secure improved services and further efficiencies through wider and deeper co-operation.”

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