It's no wonder BA and AA are concerned.
Their plans to effectively merge are not going according to plan. When they announced in August last year, for the third time, their proposals to combine, they said that the application for anti-trust immunity would be cleared under the Bush administration. Their dream turned sour.
Rightly, the regulators need to look in great detail at what the two airlines are trying to do. If their plans were allowed, BA/AA would have a stranglehold on some of the busiest routes in the world into and out of London's Heathrow.
That's what makes this immunity application very different from those of other alliances, such as Skyteam or Star. BA already has a dominant presence at Heathrow, which is full and constrained, with nearly half the takeoff and landing slots. When combined with AA, the two airlines would have market shares that regulators bawk at: 49% on LHR-LAX; 63% on LHR-JFK; 66% on LHR-ORD; 75% on LHR-MIA and 82% on LHR-BOS. Not to mention the 100% monopoly on LHR-DFW.
It is not in the best interests of consumers for one combined group to have such a lock on key overlap routes. We know what happens in such cases - prices rise as the monopoly supplier squeezes out rivals. Choice disappears. Service quality deteriorates. American carriers already offer some of the worst service in the skies. Some say to us, well, wouldn't that be good for Virgin Atlantic? It would, if we were able to fend off this monster monopoly. But, it would be impossible as they would be dominant among travel agents and suck the life out of their rivals.
It is no excuse for BA that they are facing a fight for survival. That's what healthy competition should produce. If a carrier is weak, it should be allowed to go to the wall. Governments shouldn't be stepping in to prop up ailing airlines. So, the regulators musn't allow BA/AA to progress because economic conditions are tough. What would such a beast look like when the economy improves and recovery enables them to benefit from a bad decision made in a recession?
Luckily, the regulators will also be asking what are the consumer benefits from this planned tie-up? It's difficult to find any. Nothing's changed since the last two applications for immunity failed.
Virgin Atlantic is still red hot in its 25th birthday year. Winner of Best Scheduled Airline to the USA, and Best Airline Business Lounge, find out more at www.virginatlantic.com/stillredhot
Richard Branson
on June 8, 2009 6:36 PM | Reply
He forgot the 75% market share LHR-MIA.
on June 8, 2009 6:48 PM | Reply
Flightglobal has allowed Richard Branson to use its "editorial" to place an advertisement for his airline. I hope that it will extend the same courtesy to Willie Walsh of BA.
Sir Richard has demeaned the privileged position of guest editor.
on June 8, 2009 7:05 PM | Reply
Save us from this monopolizing of air traffic. Two so different airlines with mentalities that are miles apart will never do any good and is double whammy antitrust.
Let us hope the lawmakers are not in BAAA's pockets.
on June 8, 2009 7:25 PM | Reply
Richard,
Give it a rest, You need to pick a new song.
Doug
on June 9, 2009 1:48 AM | Reply
Completely agree with Kai - AA and BA seem so different, can't imagine how they'd go together. Would a BA biz pax be happy to go on AA instead? I don't think so.
And I personally see no problem with a guest editor plugging his airline. Anyone would do the same and he isn't pretending to be impsrtial.
Let's face it, even the normal editors/reporters will have their biases and favorites - who upgraded them last time they flew, etc.
on June 9, 2009 5:36 AM | Reply
Mr Richard Branson has not done justice to the guest editor's job. Mr Branson, please do remember that you are heading an airline. You are not the policy maker.
Everything is fair in business and war. Let BA and AA do whatever is feasible to them.
Why do you cry whenver there is a mention of British Airways? I think Mr Branson is obsessed with BA. He is not concerned about passengers. He is simply concerned about his business and his lifestyle.
Stop using nuetral media like this for your personal gains.
on June 9, 2009 2:33 PM | Reply
I suggest your aggrieved commentators on Branson's comments give it a rest; surely one should expect an owner of a rival airline to have a go at them(AA, BA) and particularly the suggested BA AA tie up.
No reader is under any obligation to agree with his expressed views. These views should be addressed on their merits, if any.
Well done to FG