British Airways

Although Southern California still enjoys shorts and T-shirt weather, airlines have already started to roll out discount fares for Thanksgiving, Christmas and New Year's travel. This is great news for bargain-hunting travelers, but it signals growing desperation among U.S. airlines, which have seen revenues drop 21% in July versus the same month last year, according to the Air Transport Assn. of America, the industry trade group that represents most passenger airlines in the country.

British Airways on Tuesday urged its staff to work for nothing in an effort to save the company money. British Airways is struggling to come up with ways to save cash after reporting its biggest full-year loss since the former national airline was privatized in 1987. BA chief Willie Walsh has said he would not draw a salary for the month of July, and urged other employees to work for blocks of time without being paid.

British Airways and Australia's Qantas Airways Ltd. said Tuesday that they were holding talks about a potential merger, sparking hopes of consolidation in the hard-hit aviation industry. Both companies issued statements saying they were exploring a potential merger with each other "via a dual-listed company structure." Neither British Airways nor Qantas provided further details.

Where and when: London, July 27-Aug. 12. Construction costs: No current estimate. Current budget: 9.3 billion pounds (approximately $17.2 billion). Athletes to watch: Michael Phelps, Michael Phelps, Michael Phelps. Others: Serena Williams, to complete her Golden Slam of tennis; Lopez Lomong, whose story never stops; Ben Askren, American freestyle wrestler who, like Samson, cut his long hair and lost in Beijing; Liu Xiang, so a nation can stop weeping. Senior Division: swimmer Dara Torres, who will be 45; diver Dmitry Sautin, who will be 38. Obstacles to overcome: The usual, such as potential cost overruns; also, a logo that some said looks like a swastika, and possible protests by Muslim countries, since the Games coincide with the holy month of Ramadan.

American Airlines and British Airways agreed Thursday to create an alliance that would let them operate as a single carrier on transatlantic routes and counter new competitors. The airlines said they would seek antitrust clearance to coordinate prices, capacity, schedules and routes and share revenue on flights between Europe and North America. The move marks the third bid since 1996 for closer ties between AMR Corp.'

British Airways may seek regulatory approval this week for an alliance with AMR Corp.'s American Airlines that would allow the pair to operate, in effect, as a single airline on transatlantic routes. An executive at British Airways indicated that a filing for antitrust immunity permitting the alliance might be made by Friday.

British Airways said Tuesday it would merge with Iberia, Spain's national airline, as slower economies and higher fuel costs wipe out earnings. The airlines are in talks about an all-stock transaction that would create a new company with two fleets and a dual listing in London and Madrid, the companies said. The deal would be the largest in Europe since Air France acquired Dutch airline KLM for $826.9 million in 2003.

Continental Airlines Inc. and UAL Corp.'s United Airlines, which failed to complete talks this spring to become a single carrier, said Thursday that they would work together in an alliance they hope will boost revenue to offset rising fuel costs. In striking a deal with United, Continental ended alliance negotiations with AMR Corp.'s American Airlines, the nation's biggest carrier, and British Airways. Under alliances, airlines typically sell tickets on each other's flights, which can result in increased revenue.