LONDON (Bloomberg) — British Airways Plc chief executive Officer William Walsh said talks with alliance partner American Airlines and Continental Airlines Inc. were in a "very early stage".

British Airways, Europe's third-largest carrier, disclosed the discussions April 30 without giving details. People familiar with the matter said British Airways and American were talking about broadening their Oneworld alliance to include Continental.

"It clearly is driven more by what's happening in the US," Walsh said yesterday at a meeting with analysts in New York, while still declining to elaborate. "It's fair to say all of the US carriers are talking to each other in some form or another to look at how consolidation is going to play out."

British Airways and AMR Corp.'s American have failed in the past to win a US antitrust exemption to collaborate on fares and schedules. Regulators have objected to the carriers' dominance at London's Heathrow airport, Europe's busiest, where they control more than half of the capacity to and from the US.

Looser trans-Atlantic flying rules under the US-European Union Open Skies accord that took effect March 30 may change regulators' view of access to Heathrow, Walsh said.

"I wouldn't like to build these discussions up beyond where they are," said Walsh, 46. "It was just an opportunity to consider if there were opportunities with Continental and American."

Telephone messages left for comment with American's media office and David Messing, a spokesman for Houston-based Continental, weren't immediately returned. Fort Worth, Texas-based American is the world's largest airline by traffic, while Continental is No. 4 in the US.