Gulf Air is one of 12 carriers targeted for takeover by British Airways (BA) and Iberia on their way to creating the world's largest airline group, a report said.

The 12 carriers, said also to include Qantas, Cathay Pacific and Air Berlin, have reportedly been shortlisted after BA and Iberia initially considered 40 airlines, said a report in leading travel industry publication the Travel Gazette.

There is speculation that it could also include India's Kingfisher Airlines and Chile's LAN, which has announced plans to merge with Brazil's TAM.

BA chief executive Willie Walsh said the expansion plan was a long-term goal that would probably not be completed until he retired, the journal said.

But creating International Airlines Group (IAG) through the merger with Iberia had been done with the intention of pursuing consolidation, he said at the launch of a code-sharing agreement with Kingfisher, in Mumbai.

The Iberia deal and the joint venture with American Airlines were not meant to be an end in themselves, said Walsh.

'I have sat down with Iberia and we initially looked at 40 like-minded airlines who believe that the future of the industry lies in consolidation,' he said.

'We have narrowed this down to 12. Becoming the biggest airline group in the world is not a bad ambition to have.'

The creation of IAG is expected to be completed by the end of the year. Walsh will become chief executive of IAG, and BA finance director Keith Williams will become chief executive of BA.

BA and Iberia will continue to operate as separate brands.

Gulf Air would not speculate on the prospect of being swallowed up by the industry's proposed giant.

But the news comes at the same time the national carrier has revealed that it is actively seeking to join an alliance of airlines, in a bid to expand the services it offers customers and to woo even more passengers on board.

It's the latest strategic move by president and chief executive Samer Majali who has already made strides in improving Gulf Air's reliability, upgrading its ageing fleet, expanding its regional destinations and bringing big losses under control, as it prepares for eventual privatisation.

Majali believes striking an alliance would offer huge benefits and Gulf Air is currently in discussion with the major alliances.

'Yes, we are actively looking to join an alliance. Joining an alliance provides Gulf Air an immediate virtual extension to the member airlines' vast network and vice-versa,' he said.

'It enables the airlines to offer its passengers a wider and stronger network, seamless travel and the ability to book an international itinerary through a single system, thus opening new revenue streams without increasing costs.”

'The strategic advantages of joining an alliance are high providing the airline's standardised operational, safety security and service standards, a strengthened customer value proposition and the opportunity to capitalise on economies of scale, alliance bargaining power and individual members' strengths,” he added.

'Passengers benefit with access to a wide range of airport lounges, a more extensive 'Frequent Flyer' programme with the facility to exchange and trade points with alliance members, as well as competitive pricing across the alliance network and a more seamless travel experience,' he noted.

But striking an alliance would be a huge step on the route to success for Gulf Air.

'The main challenge to joining an alliance is finding a suitable partner; the alliance should be able to support the airline's business model and add value to the airline and vice-versa,' said Majali.

'We currently have 14 'codeshare' partners that include major airlines such as American Airlines, Royal Dutch and BMI, allowing us to offer our passengers seamless travel to hundreds of destinations.

'Joining an alliance would dramatically increase this and make the Gulf Air network truly global; passengers will have instant access and unified pricing structure to book a round-the-world ticket saving them time and money.

'We are continuing our discussions with the major alliances and we hope to arrive at a decision in the near future,' he added.

An airline alliance is an agreement between two or more airlines to co-operate on a substantial level.

When airlines talk about joining alliances they generally mean the largest ones - these are Star Alliance, SkyTeam and Oneworld.

Alliances provide a network of connectivity and convenience for international passengers and international packages. It also provides convenient marketing branding to facilitate travellers making inter-airline connections within countries.

Star Alliance has 28 member airlines including Air China, Air Canada and Turkish Airlines; SkyTeam has 13 member airlines including Delta Airlines, KLM and Aeroflot Russian Airlines and, as well as Royal Jordanian, Oneworld boasts Australia's Qantas, Hong Kong-based Cathay Pacific, British Airways and its partner Iberia, the flag carrier of Spain, amongst its members. – TradeArabia News Service