Iberia, British Airways (BA) and American Airlines (AA) have moved swiftly to sign a business agreement to develop joint operations between the United States and Europe. The consortium to be formed is seeking anti-trust immunity from the US´ Department of Transportation (DoT) and the EC, similar to that already achieved by rival alliances SkyTeam and Star Alliance following last year’s “Open Skies” agreement between the US and the EU.

Regulatory clearance would mean that the new group can share profits and agree marketing, pricing and capacity offering without fear of antitrust litigation. Two previous attempts, in 1999 and 2002 by BA and AA failed after the DoT insisted BA give up landing and take off slots to competitors.

Allen & Overy and Clifford Chance are advising Iberia, Slaughter & May and Uría Menéndez, BA, and Gibson Dunn, AA.

At the same time BAA, the company operating the most prestigious of Britain´s airports, and owned by Spain´s Ferrovial, has had to make rapid changes to its future business plans in the light of an impending UK competition ruling.

In a preliminary report released at the beginning of September, the UK Competition Commission has recommended that BAA, advised by Herbert Smith, should be made to sell two of its London airports - Heathrow, Gatwick and Stansted and either Glasgow or Edinburgh in Scotland. While a final ruling is not due until February, BAA has decided to put Gatwick up for sale immediately. Potential buyers include Virgin Atlantic and Manchester Airports Group.

Ferrovial’s decision to sell Gatwick so quickly is influenced by its need to cut its €29bn debt burden. It paid €22.5bn for BAA in June 2006 but then struggled to issue infrastructure bonds to replace the acquisition bridging loan. For the refinancing now in place, the largest ever carried out for a regulated utility, Freshfields advised BAA while Clifford Chance and Latham & Watkins worked for the banks.

In advance of the Commission´s report, Ferrovial had already decided to sell off Belfast City Airport to ABN AMRO for €133m (advisers L’Estrange). This follows the disposal of Budapest (White & Case) and Bristol (Osborne Clarke) airports as well as its stake in Sydney International (Blake Dawson), BAA International (Freshfields and Johnson Winter) and its World Duty Free Europe retail business (Freshfields).

Ferrovial hopes to sell Gatwick for €4bn, with many expecting Freshfields to advise them, while Iberia prays that fuel prices will stabilise long before its joint venture with BA and AA starts to show permanent savings in their operating costs. Lawyers though say there is more turbulence in the industry yet to come, both in the air and on the ground.