BRITISH AIRWAYS yesterday announced an alliance with Japan Airlines (JAL) as part of its move to build a global

grouping of airlines to win

more premium business and first-class traffic.

Under the initial deal the two airlines said they would combine booking codes on JAL's daily service between London Heathrow and Osaka Kansai from late this summer and also combine frequent flyer loyalty programmes. BA's chief executive Robert Ayling said that BA was facing an increasingly fierce battle to win premium traffic, which is the airline industry's most profitable market.

However, he declined to say whether the world's biggest international carrier was actually losing market share to rivals or was simply suffering from an overall decline in demand for premium traffic.