Since then, the airline has carried more than 1.2 billion customers on its extensive route network, and become recognised as one of the world’s elite carriers.

Paying tribute to the airline, Prime Minister Gordon Brown said: “British Airways has never lost the pioneering spirit and vision that saw it take to the skies with the world’s first daily international flight from London to Paris on this day in 1919.

“Ninety years on, the world’s most iconic airline is still proudly flying the flag and remains a great British brand. Many congratulations to all its staff – past and present, on this special day.”

British Airways chairman Martin Broughton said: “Over the past nine decades, British Airways has played its part in many historic episodes. We provided the first air links to far-flung capitals in the days of empire, flew Winston Churchill across the Atlantic during wartime, brought Queen Elizabeth back to Britain after the passing of George VI, repeatedly led the way with aircraft innovation and have often proudly transported home our sports teams from success overseas.

“We have a rich history supporting Britain and will carry this forward to our centenary and beyond.”

90 years on from that first Paris flight, British Airways now offers up to nine daily flights to the French capital of fashion and romance, all ideal for a Paris holiday British Airways offers great deals on a wide range of Paris hotels, coupled with affordable fares on flights.

The airline is marking its anniversary in a variety of ways. Swarovski, has loaned a giant bejewelled Union Flag to the airline. The stunning 4ft by 2ft artwork is embossed with more than 126,000 crystallized Swarovski Elements and will be in the British Airways arrivals lounge in Terminal 5 until September.

An internal exhibition will showcase memorabilia from nine decades of travel, while customers in Terminal 5 have been treated to members of the BA cabin crew, along with TV personality Kirsty Gallacher, modelling vintage uniforms in the terminal in the run up to its anniversary week.

The news is likely to come as a blow to BA chief executive Willie Walsh who has made it his ambition that the airline is one of a handful of carriers to emege from the current economic downturn and inevitable consolidation. BA has also since July been trying to negotiate a merger with Spanish rival Iberia.

The ending of talks is unlikely to surprise aviation anaylsts in Australia who had failed to see many benefits for Qantas.

The merger was also strongly opposed by Australian unions, who argued it would affect the jobs of several thousand employees.The flag carrier had argued a deal with BA would help it save on maintenance costs and weather the global financial downturn.

Together, the two airlines would have had annual sales of $23bn and a fleet of 500 planes.

Qantas Chief Executive Alan Joyce warned last week that the merger faced major hurdles and would only go ahead if Qantas could secure major revenue and cost benefits.

Today both the airlines said that “Qantas and BA will continue to work together on their joint businesses between Australia and the UK as part of the oneworld alliance.”

Qantas had said that should the talks with BA fail, the carrier might seek to strike a similar deal with an Asian rival.

British Airways is also targeting the replacement of existing agreements, as well as bringing in pay based on workers’ performance. Any new staff will be placed on the new terms and conditions automatically. The carrier is trying to remove the inefficiency and complexity of the current cabin crew agreements at London Heathrow, while attracting staff with competitive costs. The British Airlines Stewards and Stewardesses Association, which is part of Unite, has tried to persuade their members to resist these plans, and they say that it means the existing workers will be left high and dry.

The carrier intends to also change the culture of the company by making it based more on merit and skill, which will be enabled with pay related to performance and promotions based on merit. A spokesman for British Airways blamed the trading environment, which is the worst the industry has dealt with, on the new move. They have to offset the challenges, as well as identify the areas in the airline where they can cut costs, he said.

The airline aims to replace existing agreements and bring in performance-related pay.

Details of the shake-up – codenamed ‘Project Columbus’ by BA – are set out in a confidential internal document leaked to the union by ‘a concerned manager’ and obtained by the Daily Mail.

BA said last night that the plans were part of a ‘root and branch’ shake-up to be unveiled officially in the New Year.

The British Airlines Stewards and Stewardesses Association – part of the giant union Unite – has urged its members to ‘resist’ the plans.

The three-page BA ‘Project Columbus’ memo states: ‘Cabin crew costs at LHR (London Heathrow) are uncompetitive when compared against our main airline competitors.’

The paper said that ‘complex and restrictive cabin crew agreements’ are creating ‘a barrier to change’ and ‘hamper efficiency’.

It went on to say it will not force existing BA staff to switch to new contracts and agreements. But new staff will be put automatically on to the new terms and conditions.

The union says that means existing staff will be left to ‘wither on the vine’.

BA’s aim is to ‘remove the complexity and inefficiency of current LHR cabin crew agreements’ and attract staff ‘at competitive cost’.

BA also intends to change the airline’s culture by making it more skills and merit based ‘enabled through performance-related pay and merit-based promotion’.

The plan has infuriated BASSA. In its Christmas update to staff the union said the ‘Columbus’ plan –drawn up in secrecy at BA’s Waterside headquarters at Heathrow –should be opposed: ‘BASSA, backed by Unite, is still the strongest union in the country and we will not sit back and surrender our members’ – and indeed our own – futures.’

The union claims senior managers have been plotting for a year to ‘remove’ reps identified ‘as likely leaders or mainstays in any stand against BA’s future business plans’.

A BA spokesman said last night that this is the worst trading environment the industry has faced. ‘We have to offset these challenges and identify areas across the company where we can reduce costs.’

So far, the only benefits the potential partners are offering passengers are access to a bigger network and a larger frequent flyer program — but neither claim has been fleshed out with details.

The airlines were forced to announce last week that they were discussing a potential merger through a dual-listing structure, but they did not release details.

Under the dual listing, each airline would remain listed in its home country and would continue to operate under its own brand, but there would be a single management structure. This would allow the carriers to cut costs by up to 2 per cent, analysts estimate, but experts say it is difficult to see how Australian consumers would benefit.

The airlines already work together through the oneworld alliance and regulators allow them to fix prices and codeshare on the kangaroo route through a joint service agreement that has enabled BA to reduce its Australian flights to twice daily to Sydney.

“I do not think consumers will see much in the way of any changes on the kangaroo route,” said Derek Sadubin, chief operating officer at the Centre for Asia Pacific Aviation. “They might notice some more network enhancement beyond Heathrow but they have pretty much explored most of the opportunities already.”

Mr Sadubin said the airlines’ products were “pretty much blurred already” and could become more so.

“If anything, it might give consumers less certainty on which carrier they will be seated,” he said.

JP Morgan analyst Matt Crowe said consolidation would tend to transfer pricing power from consumers to airlines.

“Consumers have probably benefited from having incredibly competitive aviation markets putting in more capacity at lower prices than you would optimally do, and consolidation is a way of reversing that trend,” Mr Crowe said.

Cameron McDonald, at Deutsche Bank, said it was difficult to say how the deal would affect consumers, given that people did not yet know what the merger would look like.

The kangaroo route was highly competitive and it would be difficult for BA or Qantas to raise fares.

“Without doing any specific analysis around it, you have a number of carriers on that route who are dying to add capacity or take market share,” Mr McDonald said.

“So they have got to be a little careful in trying to exercise any pricing power … in a weakening demand environment.”

The merger plan reflects the Qantas view that greater liberalisation of international aviation agreements will unleash a wave of consolidation in the industry and that powerful airline groups will be best placed to survive.

It also addresses Qantas worries that airlines such as Emirates and Singapore Airlines, with hubs at the centre of busy international routes, have a competitive advantage.

Airlines such as Emirates, which sits in the centre of a growing network and can now offer one-stop flights from Australia to every continent, have been gradually increasing their presence in the local market.

Qantas mainline in September counted for over 25 per cent of the international market to and from Australia, down from 42.7 per cent in 1994, with Jetstar adding another 6percent. This compares with an 11.3percent share for Singapore, 9.4percent for Air New Zealand and 7.1percent for Emirates.

Both Qantas (other-otc: QUBSF – news – people ) and Iberia (other-otc: IBRLF – news – people ) seem to have adopted a “my-deal-or-your-deal” stance since Tuesday, when British Airways (other-otc: BAIRY – news – people ) responded to press speculation by confirming it is in talks with Qantas. On Monday, Qantas Chief Executive Alan Joyce said that “only one” of the proposed mergers could take place, and noted that there were still “significant hurdles” to overcome for a successful Qantas-BA tie-up.

British Airways obviously does not agree, though a spokesman for the airline refused to offer fresh comment. The British carrier is still officially pursuing both potential mergers, and is reportedly even trying to woo Iberia shareholder Caja Madrid into backing a Spanish-British-Australian entity. Iberia Chief Executive Fernando Conte was kept in the dark about BA’s plans with Qantas, which has added to tensions around the negotiating table. (See “Tension Brews Between BA, Iberia.”)

Although BA seems to be giving Qantas priority at the moment, Iberia has a 9.9% stake in the British Airline that may prove vital in approving any Qantas deal.

Shares of British Airways soared 10.1%, or 15.60 pence (23 cents), to 170.0 pence ($2.52), during afternoon trading in London. Leading shares in Europe were up some 7.0%, but the prospect of a BA-led global airline has buoyed investor sentiment in the stock: Qantas, Iberia and American Airlines all represent three different pockets of the world, and BA says there is “no overlap” between them.

The urgency of the economic environment may help BA’s chances, however. Despite the reluctance of Qantas and Iberia to accept a three-way merger, or to bear the brunt of BA’s pension liabilities, they have little room for negotiation. Fixed costs are high, travel demand is crippled and lucrative business profits are hard to find.

“Iberia needs a merger, and Qantas does, too,” said Stephen Furlong, an analyst with Davy Stockbrokers. “It’s hard to say who’s got the upper hand at this point.” He said Qantas was facing fresh competition from upstart Middle Eastern airlines like Emirates, which is reportedly seeking approval from the Australian government to fly between Australia and the U.S.

These include “an appropriate merger ratio,” issues connected with British Airways’ pension fund and the global economic outlook, Chief Executive Officer Alan Joyce said today in Sydney at a business lunch, the 42-year-old’s first public speech since taking the CEO role Nov. 28.

Qantas revealed the merger talks with its London-based rival last week as Joyce seeks to cut costs amid mounting losses for the airline industry. Combining with British Airways would create a company with about $23 billion in annual revenue, carrying more than 71 million passengers on almost 500 planes.

“Qantas comes to these negotiations from a position of strength,” Joyce said today. “We are in these discussions because a merger has the potential to create the global scale that would allow us to grow and enhance our services, and deliver significant revenue and cost synergies.”

Concern about pension fund liabilities has delayed progress on British Airways’ proposed tie-up with Spain’s Iberia Lineas Aereas de Espana SA, analysts at Citigroup Inc. said in a Nov. 21 report.

British Airways, which will complete a tri-annual actuarial review of its pension program in 2009, said Sept. 18 that the annual funding deficit widened to 1.5 billion pounds ($2.2 billion) as of March 31, the end of its last fiscal year.

Qantas shares rose 16 cents, or 7.2 percent, to A$2.38 at the close of trading in Sydney, paring this year’s decline to 56 percent.

No Guarantee

Joyce said there was “no guarantee” a transaction will proceed, adding that British Airways can link with Qantas or Madrid-based Iberia but not both.

“BA are conscious, as Iberia are and we are, that only one of the transactions could take place,” Joyce told reporters after the speech. “When you explore dialogue with any carrier the likelihood is that the carrier has multiple dialogues going on, that’s the way it takes place.”

The Australian carrier will look at opportunities in Asia if the British Airways talks don’t result in a deal, he said.

Merger discussions began under former CEO Geoff Dixon, who retired from the role last month and will remain a consultant to Qantas until the end of March.

Joyce said the Qantas name on airplanes is a “non- negotiable” item in the talks as he prefers to maintain existing brands, similar to what was done at Air France-KLM when the French company bought KLM Royal Dutch Airlines NV in 2004.

Australian Headquarters

Qantas will retain an Australian headquarters and any deal will comply with rules preventing majority foreign ownership.

The carrier has “flexibility” to do more cost cutting and improve productivity, Joyce said. The airline last month said 2009 profit may fall 64 percent to A$500 million as slowing demand for international travel forces it to cut passenger capacity and sideline planes.

Joyce said the airline, which spends A$1.4 billion ($911 million) on maintenance each year, hasn’t lowered safety standards. He made the comment in relation to incidents this year, including a mid-air plunge that injured 40 and an exploding oxygen tank which blew a hole in the fuselage of another flight.

Customer confidence in Qantas’ safety record has fallen after the incidents, with nearly two thirds of Australians saying its standards have worsened in recent years, the Australian newspaper said today, citing a survey by UMR Research.

“A confluence of events have shaken that safety perception,” Joyce said. “The most important thing is that safety is the number one priority.”

That was Willie Walsh in May, telling MPs on the Transport Committee why he had pressed ahead with opening Heathrow’s Terminal 5 – even though he knew the building was not fully ready.

Fast forward seven months and the former pilot now running British Airways is once again playing the percentages game. Trained from the cockpit to think in three dimensions, Mr Walsh has brought a similar mentality to the BA boardroom.

This week it emerged that the UK flag-carrier is in merger talks with the Flying Kangaroo, the Australian airline otherwise known as Qantas. The surprise is that this comes on top of two other putative deals.

Since July, BA has also been trying to negotiate an all-share merger with Spain’s Iberia, while badgering the regulators for anti-trust immunity for a revenue-sharing tie-up with American Airlines. All four carriers are partners in the Oneworld alliance, co-operating on routes around the world.

Risks abound. The risk that, by pursuing a trio of deals simultaneously, Mr Walsh ends up with no deal. The risk that, in his enthusiasm to find a partner, Mr Walsh draws attention to BA’s own weaknesses. The risk that he takes his eye off the ball just when recession and volatile oil prices have sent the whole industry into a tailspin. Even the personal risk that he lands one or more deals – but at the price of his own job.

For Mr Walsh, these are calculated risks because, as US astronaut Jon McBride once put it: “A pilot who doesn’t have any fear probably isn’t flying his plane to its maximum.”

The maximum for Mr Walsh is the creation of the first global super-carrier. He has never made any secret of his desire for BA to play a starring role in the overdue consolidation of an industry fraught with anachronistic regulations, notably around ownership and flying rights.

Neither has he hidden the extent of his ambitions. Back in October 2007, when BA was previously tilting at Iberia as part of a consortium with private equity house TPG, Mr Walsh pointed out presciently: “Iberia is very interesting to us but it’s not transformational.”

Qantas would be. As Dresdner Kleinwort analyst, Andrew Evans, pointed out: “Strategically, BA appears to want to lead the way in global consolidation after lagging both Air France and Lufthansa in European consolidation.”

Mr Walsh is adamant he can complete both the Iberia and Qantas mergers but nobody really believes he can do both simultaneously – particularly when there are so many regulatory constraints.

More important, it is also the view of Fernando Conte, Iberia’s chairman and chief executive. Mr Conte could not disguise his displeasure last week at the way Mr Walsh sprung the Qantas talks on him just an hour before they were announced. He has summoned Mr Walsh to a meeting to explain exactly what they had been talking about for the past six months. Mr Conte said: “I think it’s more reasonable to start the [tie-up] process within Europe and then the next step should be between continents.”

Like it or not, one of the two mergers must be done first. So which one? As an intra-European deal Iberia takes the Air France/KLM route map. BA already owns 13pc of Iberia; Iberia 9.9pc of BA. Merging the two brings more initial scope for cost cuts and delivers BA access to Iberia’s 20pc share of the Latin American market – and £2bn gross cash.

Four years after the merger, Air France/KLM is on track to deliver synergy benefits of around £600m this year towards an eventual target of €1bn (£870m). Their hubs are closer geographically than BA’s Heathrow and Iberia’s Madrid base. But a read-through from Air France/KLM implies £400m-£500m of annual cost savings for BA and Iberia.

There are two major stumbling blocks, even before the knotty question of who runs the show. These are: valuation; and BA’s ballooning pension deficit.

When the Iberia talks were first announced in July, BA envisaged taking 65pc of any combined carrier. Now the market capitalisations are suggesting something closer to a 50:50 deal – not least because of the £13bn of final-salary pension liabilities in the BA hold, which look more like a ticking time-bomb in these falling financial markets. Mr Conte admitted last week that he still hadn’t got his head round the issue.

Says one observer: “BA and Iberia have been talking for six months and they haven’t apparently got anywhere. Conte probably thought he had a free run at BA, but he’s taken a long time.”

The momentum appears to be with the Blue/Red deal – code names for BA and Qantas. No one could ever suggest that Aussies and Poms speak the same language, but culturally BA/Qantas is a better fit – not least given that Mr Walsh and Qantas’ new chief executive Alan Joyce are two Irishmen who know each other from Aer Lingus days.

Qantas would bring BA instant exposure to the faster-growing Asian markets and more flexibility to combine fleet – though, thanks to the distance, fewer upfront cost-savings. Analysts are pencilling in, say, £280m initially or around 2pc of the combined cost base.

On valuation, the two airlines are closely matched – though BA is currently valued at around £200m less than Qantas’ £1.9bn, which begs the question why BA wants to lock in a deal at a cyclical low. For much of the last five years, a more natural split would be 55:45 in favour of BA. But, thanks to its exposure to its main US market, BA’s earnings are much more volatile than those of Qantas.

Qantas’s own final salary pension scheme has less than £1bn liabilities. But a bigger problem is structure. Qantas must be at least 51pc Australia-owned and have an Australian chairman. This partly explains why the pair envisage a dual-listed company. Both carriers would retain their separate stock market listings and existing flying rights, but have a top board with “overlapping directors” – six each from both airlines, three of whom would also sit on the other carrier’s nine-strong board.

Early indications are that Qantas chairman Leigh Clifford would chair the combined board, with Mr Walsh chief executive and Mr Joyce in some sort of chief operating officer role – but that could change.

The risk is deadlock on the combined board if BA and Qantas directors disagree. If that happens, there is a nuclear option – for shareholders to break the deadlock with a vote or to oust directors. That’s no way to run a company, though.

Mr Walsh would do either deal first. Some analysts reckon it would be easier to integrate Iberia after Qantas rather than the other way round – though another complexity is that Mr Walsh has made his application for the American Airlines tie-up in co-operation with Iberia.

Mr Conte made a good point this week. In the last 60 years, airlines have generated $11,000bn (£7,500bn) in revenues but just $32bn net profits. Even in the context of that dismal financial history, Mr Walsh reckons “we are in the worst trading environment the industry has ever faced”. Such an environment is brutally unforgiving.

Says John Strickland, director of aviation consultants JLS Consulting: “I rate Willie Walsh highly but he’s taking on an awful lot. The thing about the airline industry is there are so many things that can come up from behind and whack you.”

That, perhaps, is the biggest risk of all.

The company want to close their base at Glasgow airport with the loss of 138 jobs and operate from Heathrow instead.

Staff have staged a high-profile fightback, including setting up a website, www.savebascotland.co.uk.

Yesterday, they held a two-hour meeting in a hotel at Glasgow airport to discuss their next move.

Unite union airport officer Oliver Richardson said: “The meeting was successful but sadly coincided with a threatening letter to all employees from the company.

“It is basically trying to force employees at Glasgow to make a decision on their futures by December 19 – six days before Christmas – otherwise they will be moved to European short-haul flights operating from Heathrow as of January 17 whether they like it or not.

“It’s a threat and a bullying tactic when employees have followed procedures and stated they are willing to continue discussions. Today’s meeting was to give an update and discuss moves but it has coincided with this letter from BA. It has left employees angered.

“We have strong support from MSPs and Scottish Secretary Jim Murphy. The fight goes on.”

BA chief executive Willie Walsh wants some jobs to go through voluntary redundancy and the others to go to London.

Union bosses are to meet the company next week for further talks.

The Daily Record revealed on Wednesday how BA plan to scrap the early morning “red eye” Edinburgh – Heathrow shuttle often used by Prime Minister Gordon Brown.

Details emerged just weeks after the airline dumped the Glasgow-Heathrow early flight.

It also emerged this week that BA are in talks about a merger with the Australian flag-carrier Qantas.

It is Ryanair’s second tilt at the Irish flag carrier, where Mr. Walsh once sat in the CEO’s chair. The last attempt by the low-cost carrier to absorb its Irish rival was rebuffed from all sides: The Irish government, which owns a quarter of Aer Lingus, said no and so did the Aer Lingus unions, which control 14 per cent of the stock. The final blow came from Brussels, where the European Commission ruled against the combination on the grounds that it would create a monopoly on routes from Dublin to European cities.

The indefatigable Mr. O’Leary reckons he has a better chance this time. The world has changed, he says: airline bankruptcies, recession and the recent catastrophic surge in jet fuel prices have changed the landscape. More importantly, the Ryanair chief says, look at what everyone else is doing. Air France is in bed with KLM. Lufthansa has taken over Swiss International Air Lines and is flirting with Austrian Airlines, Brussels Airlines and British Midland Airways (bmi), the British carrier. EasyJet has taken over GB Airways.

The Irish government might be tempted; Mr. O’Leary is dangling a €188-million ($300-million) carrot under its nose and Brian Cowen, the Irish Prime Minister, might be tempted to take the money, fill the draining government coffers and ignore the bluster from the airline unions. After all, Aer Lingus is losing money, the airline’s bosses are squabbling with the unions about laying off 1,500 staff, and if the choice is between a bust national airline or an Aer Lingus run by an aggressive cost-cutting empire builder, the solution is obvious.
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The solution is less obvious in Brussels, where the European Commission is showing no sign that it is prepared to suspend competition rules just because a few businesses are running out of cash. The Commission has allowed governments to ride roughshod over the rules barring state aid in order to keep the banking system alive. For it to suspend merger control procedures as well would be to throw in the towel and concede that competition policy is a luxury – fair-weather politics for a world of cheap money, low oil prices and soaring profits.

Mr. Walsh is also reading the competition runes but he is hedging his bets. He has an astonishing three mergers on the go. BA’s long-running attempt to build a combined business across the Atlantic with American Airlines is still stuck with the U.S. Department of Transport, which needs to grant antitrust immunity. Meanwhile it has launched merger talks with Iberia, another code-sharing partner, and on Tuesday Mr. Walsh announced the final piece of his strategy to wrap the Union Jack around the globe.

Qantas is a glittering prize; it would give BA global reach and the opportunity to secure huge efficiency gains in the use of aircraft and crews. Qantas flies throughout East Asia and crosses the Pacific to Los Angeles. BA dominates the North Atlantic and stretches to the U.S. West Coast and into Asia. BA/Qantas would be a round-the-world airline, but it would be more than just a gimmick. BA already shares business on flights from London to Sydney and a merger would allow it to share resources and passengers around the globe.

BA used to have a slogan that it was the world’s favourite airline. Having been accused of price-rigging and having suffered debilitating labour unrest, Mr. Walsh might just settle for being the first global airline.

The question is whether the regulators will allow it. Other airlines are making aggressive moves, notably Lufthansa, which has been gobbling up market share among its neighbours both geographic and linguistic. Air France, too, favours regional dominance. With KLM it has two of the top three continental European airline hubs (Schiphol in Amsterdam and Charles de Gaulle in Paris).

BA’s strategy is to dominate routes, first the Atlantic and now the Kangaroo route to Australia, rather than passenger markets. It remains to be seen how the regulators respond but they will be mindful of the dangerous trend in air traffic. The International Air Transport Association last month reported a second month of global shrinkage in traffic; in Asia it has declined by 6 per cent, well ahead of a 2-per-cent cut in capacity by struggling carriers.

If governments want to use airlines as cash cows, punishing their carbon emissions with new taxes even as they tax passengers with duties, they need to recognize that the airlines can no longer be quaint national carriers. They must be multinationals and their competitive reach must be global.

Following an initial approach from Qantas, BA said it was studying a merger with the Australian flag carrier “in a dual-listed company structure”. “This is an exciting step towards the creation of the first truly global airline,” said Willie Walsh, BA chief executive. “We have complementary networks and similar views about consolidation.”

BA shares rose 17½p or 12.5 per cent on the news to 157p.

The carrier said that under the structure being discussed, each airline would remain a separate legal entity and would have separate shareholders. There would be “a combined balance sheet, overlapping boards of directors and an integrated management team”. If a deal emerged it would be “a merger of equals”.

There was “no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate”, the airline said.

The UK group said it was continuing discussions on a merger with Spain’s Iberia that have been under way since July but investment bankers close to the talks warned last night that BA would not be able to manage both deals. “It is going to have be one or the other,” said one banker involved. “A three-way deal would have a logic. It would be nice to see, but the reality is one deal or the other.”

The potential merger was attacked by Virgin Atlantic, BA’s UK long-haul rival. Steve Ridgway, chief executive, said, “one day it’s Iberia, then it’s American, and now Qantas. The only strategy BA seems to have is to lock up some of the busiest routes in the world, against the consumer interest.”

A merger between BA and Qantas would be much more ambitious than the Iberia deal and would be the first time two carriers have attempted to combine operations between two regions of the world.

Airline consolidation has only taken place within single regions such as this year’s Delta Air Lines takeover of Northwest Airlines in the US.

Most governments limit foreign ownership in their carriers. Australia is looking at reforms to its rules, which say that an individual foreign investor can own only up to 25 per cent of Qantas, while foreign airlines can collectively own up to 35 per cent.

In November 2007 a High Court judge dismissed the £150,000 claim against British Airways by Miss Andrews, from Treverbyn, and held that the pilot of the aircraft had done all he could.

However, Miss Andrews, who gave up her 30-year career after receiving a back injury and broken ankle in the July 2003 incident, claimed at London’s Appeal Court that the judge was wrong and sought permission to challenge the verdict.

Three of the country’s senior judges backed Judge Nigel Wilkinson QC in his decision. Lady Justice Smith said he had been entitled to make the findings he made.

During the incident, as the plane approached Chicago Airport, the court was told that turbulence was so bad that Miss Andrews was thrown off the ground and twice hit her head on the ceiling of the galley where she had been working.

It was argued that the pilot who was flying within 20 miles of a thunderstorm, ought to have ordered cabin crew to strap themselves in.

However, the High Court judge in his decision had cleared the pilot and co-pilot of negligence.

He had taken the view that they had considered the conditions they were flying in and that there was nothing to be criticised in the action they took even though there was a large thunderstorm in the vicinity.

In dismissing Miss Andrew’s challenge to the High Court ruling Lady Justice Smith sitting with Lords Justices Mummery and Goldring said she agreed with the High Court judge’s verdict.

Lady Justice Smith said: “The thunderstorm was very large and extremely hazardous.

“The central pillar of the cloud was about 45,000 feet high and the anvil of cloud spreading from the central pillar covered an area about 100 miles in diameter.

“The anvil is the cloud formation which results when the wind blows the top of the cloud pillar along horizontally.”

She said during the flight the aircraft encountered some turbulence, so much so that, in addition to the passengers being required to wear their seatbelts for significant periods, the cabin crew had also to be strapped into their seats.

However, she said the aircraft had detoured to avoid the storm and that the turbulence it hit which resulted in Miss Andrew’s injuries was unexpected.

Lady Smith continued: “The only question for the judge was whether the turbulence had been reasonably foreseeable on the flight path taken by the aircraft.

“He held that it was not.”

She said that in her view the judge had been entitled to listen to the evidence in the case and make up his mind from that.

Details emerged yesterday, just weeks after the airline dumped the Glasgow-Heathrow early flight.

And the Record can reveal that in March, BA will also chop their last flight back from Heathrow to Edinburgh.

The late-night Glasgow to Heathrow service was also recently dropped.

The reduction in flights comes as BA press ahead with plans to close their Scottish cabin crew operation which serves both Glasgow and Edinburgh.

A total of 138 jobs will go if the shutdown takes place in January.

Staff only became aware of the plan to slash Edinburgh flights when they examined rotas which start in March.

A cabin crew worker said last night: “Slowly, but surely, it seems all BA’s Scottish services are being scaled back.

“Nothing is safe any more. We genuinely fear the airline may pull out of Scotland altogether.

“The PM and the Chancellor use these flights and so do a lot of MPs, MSPs and business people. We hope they will put pressure on BA to change their mind.”

The axing of the Scottish shuttles comes as BA are anxious to use as many of their Heathrow landing and take-off “slots” for long-haul flights to maximise income.

The cabin crew source added: “The domestic flights are at an obvious disadvantage.”

Cabin crews have staged a high-profile fight against the closure plan.

BA insist the closure of the Glasgow base will mean no compulsory redundancies and have offered relocation to London for staff.

In the past five years, BA have slashed their workforce in Scotland with the closure of their Glasgow reservations call centre, Scottish travel shops, subsidiary bases, Glasgow ramp engineers and ground staff at Aberdeen, Edinburgh, Glasgow and Inverness.

It also emerged yesterday that BA are in talks about a possible merger with Australian flag-carrier Qantas.

The news comes on the day that the carrier announced that the number of people flying in its premium cabins had slumped by 9.2% year on year.

A BA spokesman said: “The premium cabin training course is aimed at improving the levels of onboard service even further by giving our crews even greater skills. It looks at a wide range of customer service issues from the cabin environment but also takes quite a bit of the course by looking at the very best non airline industry standards e.g. five-star hotels, Michelin star restaurants, and also looks at how the very best companies engage with customers and make them feel appreciated.”

During his 19-year career with BA, David Andersson-Wood, 45, of Richmond, said he was overlooked for promotion and received desultory pay rises and minimal bonuses despite performing well in his £47,000-a-year job.

The tribunal panel in Reading heard how conditions in Mr Andersson-Wood’s job deteriorated in 2000 when fleet manager Ann Brown took over as his boss.

He contacted Ms Brown, who no longer works for BA, to discuss harassment he was receiving after investigating a rape case between two BA cabin crew in 1999. “[She said] I should stop being a ‘drama queen’. I asked her what she meant. She said: ‘Your lot over-dramatise everything’.” She allegedly later said she found his sexual practices distasteful.

When Mr Andersson-Wood filed two complaints upon finding his pay rises and bonuses were lower than those of immediate colleagues, he was allegedly told by a human resources manager: “If you want a market level of pay, go and work for a pharmaceutical company.”

Negotiations between a BA delegation headed by chief executive Willie Walsh and the Transport and General Workers Union (TGWU) had restarted, a BA spokeswoman told AFP but did not comment further.

BA is struggling to head off having to cancel all flights to and from London’s main Heathrow airport because of the planned strike on Tuesday and Wednesday over sickness absence, pay and staffing levels.

The action, involving 11,000 stewards and stewardesses, will also hit domestic and European flights from London Gatwick.

Unions have warned that there will be two more three-day work stoppages in February if the dispute remains unresolved.

BA has warned that services will be affected either side of the strike action, leading to flights also being disrupted on Monday night and Thursday morning.

The British Airways (BA) steward was told to leave his post after he was reported at Londons Heathrow Airport on Dec 17.

One member of cabin crew has been suspended on suspicion of theft, The Sun quoted an airline spokesman, as saying.

While such incidents are extremely rare we take all allegations of theft extremely seriously, the spokesperson added.

After the event, the furious staff blasted the heavy-handed move and compared the airlines company to a police state.

The cabin crew member on a long-haul flight took a muffin destined for the bin, the BA worker said.

Now his career hangs in the balance. Everyone is up in arms it is a disgusting way to treat staff, the worker added.

A source has revealed that BA and other airlines have adopted a zero-tolerance approach that has left workers terrified.

Staff are scared of putting a foot wrong. BA is acting like a police state, the workers said.