British Airways revealed yesterday it was "exploring opportunities for co-operation" with two of the carrier's biggest US peers, American Airlines and Continental Airlines.

Current regulations on foreign ownership of US airlines would rule out a full-scale merger but options could include applying for immunity from US antitrust regulators - a move that, if successful, could grant the three airlines the right to co-ordinate schedules, fares and frequent-flyer programmes and pursue jointly lucrative corporate clients.