From today's Sunday Times (UK) "THE owner of British Airways is manoeuvring to become a cornerstone investor in a new American mega-airline. International Airlines Group (IAG), which owns Iberia as well as BA, has signed a confidentiality agreement that will give it access to the books of American Airlines. American, a BA alliance partner, collapsed into Chapter 11 bankruptcy protection last year but is continuing to operate while it seeks new investors to back a relaunch. It is widely expected to merge with US Airways. The new carrier would rival the world’s largest — United Continental Holdings — and IAG could become an investor after joining the rescue talks. Securing ties to American Airlines is vital for BA. The two carriers have a special joint venture on North Atlantic services that is exempt from competition law. They are free to collaborate on pricing and schedules. They were founder members of the Oneworld alliance, a commercial grouping of international airlines. Rules on foreign ownership prohibit overseas carriers from buying more than 25% of a US counterpart. Senior industry sources say American Airlines may opt to sell a stake to IAG as a precursor to a full-blown merger with US Airways. A cash infusion from BA’s parent could give American a better chance of remaining independent or provide greater leverage in merger talks with US Airways. US Airways is part of the Star Alliance, a rival to Oneworld, but it has promised that the combined airline would keep the American name and American’s flights would remain in Oneworld, which includes Cathay Pacific. Willie Walsh, head of IAG, said last month: “We are open to [buying a stake] if there is a strong strategic argument for investment. But it would be a small investment.” American serves about 250 cities in more than 40 countries with 3,400 daily flights. US Airways serves 200 destinations in 28 countries with 3,200 daily flights." http://www.thesundaytimes.co.uk/sto/business/Industry/article1116626.ece (there is a paywall) Interesting that bit about "It is widely expected to merge with US Airways." And, yes, the foreign ownership rules would still apply, as noted in the article.