Cathay Pacific Airways has entered global alliance talks with American Airlines, British Airways (BA) and Japan Airlines, as it attempts to lessen the impact of the regional tourism slump, according to aviation industry sources. Wire agency Air Transport Intelligence said talks between Cathay, American Airlines and BA had been ongoing for several months but had gained impetus since Japan Airlines entered the discussions last week. Analysts said the proposed alliance was emerging as the most probable of at least three other possible international alliances Cathay may enter, ending its year-long search for a partnership. Global alliances allow airlines to increase their passenger loads without the comparative rise in costs, through offering connecting services with other carriers. Analysts said with Cathay suffering from a slump in regional tourism - the carrier last week reported its 1997 income plunged 55.5 per cent - the airline would be best served by swiftly deciding which alliance to join. A Cathay spokesman yesterday confirmed the airline was negotiating with members of the possible grouping, but stressed the airline had not made a final decision. Corporate communications manager Kwan Chuk-fai said: 'We have been talking to many carriers but at this time we are still evaluating many opportunities. We would like to proceed as quickly as possible to respond to the market situation.' Cathay has been searching for alliance partners since at least the middle of last year, but only after the regional crisis bit deeply into its passenger loads has the search become more urgent. Sources said American Airlines and BA had been trying for months to convince Cathay to join as a partner in their own planned alliance, which was proposed 18 months ago. As Cathay's business began to deteriorate after the handover last year, the firm's management has shown signs of being more receptive to such overtures. The airline had also held talks with KLM Royal Dutch Airlines and Northwest Airlines, with Delta Air Lines and Swissair, and with the six partners in the Star Alliance. Star presently comprises Air Canada, Lufthansa, SAS, Thai Airways International, United Airlines and Varig. Industry watchers said if American Airlines, BA, Japan Airlines and Cathay were able to bring their proposed alliance into reality, it would become a strong rival to Star. Analysts said the group made 'much more sense' for Cathay than other alliances it was said to be considering. Indosuez WI Carr research analyst Samuel Lee said: 'This alliance should benefit all parties. 'If Cathay doesn't enter an alliance it will hurt them. But just how much they would gain from this alliance is not yet clear.' An analyst with a United States investment bank said: 'There are too many players in the Star Alliance already. An alliance with British Airways, Japan Airlines and American Airlines makes much more sense.' The analyst pointed out that Singapore Airlines was itself poised to become a member of Star, meaning if Cathay joined there would be a conflict over whether Singapore or Hong Kong would be chosen as the grouping's regional hub. ING Baring Securities Hong Kong investment analyst Nam Park said: 'There would definitely be benefits. The increased visibility will give increased revenue.'