I vivdly recall the day when the last AA - BA agreement was ceased.
The plug was literally pulled - I was on duty at the time when a telex came in. The connection between the Res systems was quite simply turned off.
No real explanation was ever given - it was one of those things that was frowed upon if discussed.
If I recall there was discussion about the degree of freedom rights wrt to European flying. I.e. 6th degree where an airline can overfly a country, land, take passengers, take revenue. There was the Grandfather LHR slot issue too.
I think Bob Crandall was at the helm of AA at the time. He took no prisoners and I think he saw that the rights matter was never going to resolved.
So where are we now ? A united Europe with freedom of trade ?
I don't think so. From what I can see little has actually changed so I am somewhat surpised to see this idea being bounded around.