US restrictions on foreign organisations owning more than 25% of a US carrier would put a stop to any AA-BA tie-up. That's what nearly stopped Virgin America from taking off (the DoT and other airlines had the concern that Virgin America's share structure hid a majority stake for SRB in the airline, and that the CEO was unduly influenced by SRB decisions).
UK regulations allow a more generous stake, but still no outright purchase/merger. So a BA-AA merger is not possible.
Apparently DL owns a bit of CO, so a New DL (DL + NW merged) would mean that either DL could divest its stake in CO, or ask the new partner in the airline (KL, since KL owns a stake in NW) to help finance a takeover of CO to merge into the New DL. UA is not in a position to be attempting takeovers considering how they begged everyone to cut their salaries to stay afloat.
LH-VS (especially in the light of some rumours aired in a piece linked to in the BMI thread) could work based on a 50/50 approach, together with a merger/purchase of BD.
Berlusconi is trying to keep AZ independent, even though AZ has been begging for years to join up with AF-KL, and the latest bid nearly got that done (and got scuppered by the Italian unions). If no domestic bidders come out of the woodwork, AZ will either go to the wall, or Berlusconi will have to let AZ merge with AF-KL... Will the new entity be called AirFranceKLMAlitalia then? Or AKA perhaps? I know... I'm being silly now.
Interesting times...
S.