British Airways’ link-up with American Airlines will provide access to millions of business class customers for its new financial services division, due to launch next year.
BA has set up a special division to look at ways it can exploit the boom in consumer financial services. It is thought the BA board will consider the plans in the autumn.
The airline is understood to be talking to a number of banks and investment houses about offering services on its behalf, such as unit trusts, life insurance products and a credit card. BA has already launched a Pep product and has a Diners Card.
It is understood BA will have access to American’s database for its frequent flyers club, called AAdvantage. The deal announced yesterday provides a tie-up of BA’s Air Miles scheme with American’s programme, enabling members to earn and redeem rewards on both airlines’ services.
BA rival Virgin Atlantic has already protested about the deal, saying it will reduce competition and lead to higher fares. Any boost to the financial services side will also anger Virgin, which started its own unit-trust operation, Virgin Direct, in March 1995 and is now sitting on funds of about 300m.
The two airlines unveiled a marketing and revenue sharing alliance which is due to come into force in April next year.
The link-up allows for code-sharing, enabling passengers to fly on both airlines across the two carriers’ networks with a single ticket and check-in.