Branson continues to lash out against Oneworld antitrust

Washington DC
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Virgin Atlantic Airways' future will be uncertain if regulators approve antitrust immunity for Oneworld members British Airways (BA) and American Airlines, Virgin Atlantic founder and president Sir Richard Branson says.

Branson has long objected to his competitor's proposed transatlantic tie-up because he argues it would impact passengers due to higher fares and hurt Virgin Atlantic's bottom line.

"It would obviously affect our revenue but [I'm] not sure how much," he said during a speech in Washington today.

Calling the proposed venture a "merger", Branson says he "cannot guarantee Virgin Atlantic's survival" if antitrust immunity is granted to his competitors.

The UK carrier has repeatedly argued that Oneworld receiving anti-trust immunity would affect transatlantic competition and depress connecting feeder traffic to other airlines at London Heathrow airport.

"It will be the end of red hot competition," Branson says, adding later that the economic downturn is no justification for granting anti-trust immunity to BA and American.

In 2008, American, BA and Iberia, along with Finnair and Royal Jordanian Airlines, applied for anti-trust immunity with the US DOT for a joint agreement on flights between North America and Europe.

Given the congestion and capacity constraints at London Heathrow airport, other carriers would be unlikely to mount meaningful competition on Heathrow-US routes should the tie-up receive regulatory approval, Branson notes.

Of the city pairs Virgin Atlantic and its two rivals already offer, Branson says BA and American already control 80% of traffic on Heathrow-Boston flights, 73% of traffic on Heathrow-Miami connections, 64% of traffic on Heathrow-New York JFK service, 64% of traffic between Heathrow-Chicago O'Hare and 47% of traffic from Heathrow to Los Angeles.

Virgin Atlantic, which also flies from London Gatwick airport, offers 18 transatlantic destinations to the Americas and the Caribbean. Offering more operations from Gatwick is not a preferable option should antitrust immunity occur because the economics of Heathrow are better, Branson says.