After U. S. regulators gave tentative approval to an expansion of the alliance as long as the airlines give up four daily pairs of slots at London's Heathrow airport, Sir Richard Branson, Virgin Atlantic's boss warned that support for a deal between British Airways and American Airlines is "a kick in the teeth" for passengers.

Shares in British Airways and Lberia rose over 4% after news U. S. authorities have cautiously allowed American Airlines and its one world partner's antitrust immunity on trans-Atlantic routes. If it is made final after a period of discussion, will allow American Airlines, BA, Iberia, Finnair and Royal Jordanian to coordinate schedules and pricing on North Atlantic routes. It means that they can merge and operate as a single firm on issues like marketing and capacity.

"Four daily slot pairs is better than our expectation of 6 and significantly better than the 32 that the alliance was asked to give up back in 2001, the last time BA/AA applied for immunity. We see this as very important for BA's strategic future and we think the (BA) share price could be up 5-10% on the day", said analysts at Deutsche Bank.

At around 9:45 in the morning, BA was up by 4.3% at 203.9p, topping the list of gainers in the FTSE 100 blue chip index, while Iberia was up by 4.8%.