The European regulators have backed BA’s merger with Spanish carrier Iberia, which will form a new company named International Airlines Group. The BA and Iberia brands will continue to operate independently within the new business.
BA has also been given permission to form a cross-Atlantic alliance with American Airlines, with the EU offering the airline immunity from anti-trust laws that prevent brands from co-ordinating prices and schedules.
The airlines, both members of the Oneworld global alliance, can begin the partnership later this year, subject to approval from the US Department of Transport.
The alliance between BA and American Airlines has proved controversial, with Virgin Atlantic claiming the partnership will harm competition in the industry and lead to higher fares.
Virgin's founder Sir Richard Branson wrote a series of open letters to senior politicians in both the UK and the US, as part of a wider ‘No way BA/AA’ campaign that included print ads and painted messages on its aircraft.
The decision was applauded by Chris Cuddy, chief executive of online flights search company Cheapflights Media, who said: "This move helps keep the EU airline industry competitive for travellers, which is good for everyone."