Branson strikes out at BA-AA tie-up

London
Source:
This story is sourced from Pro
See more Pro news »

Virgin Atlantic Airways president Sir Richard Branson has lashed out at British Airways' (BA) and American Airlines' anticipated third tie-up attempt, which he argues would severely damage transatlantic competition.

Branson has written to US presidential candidates Barack Obama and John McCain outlining his concerns over the anti-trust application. American Airlines, British Airways, together with fellow Oneworld carrier Iberia, are expected to file an antitrust immunity application in the next week.

In his letter, Branson says: "BA and American Airlines will argue that their alliance is now acceptable because the competitive environment has changed with the 'open skies' accord on UK-US routes.

"This is a complete red herring. Open skies - which is only a temporary accord as it may be unwound in 2010 - has not significantly increased competition on UK/London-US routes."

He adds that the economic slowdown should not be used to "waive through" the application, stressing that consideration should be given to the longer-term.

"The job of the regulators is to assess the long-term impact of the alliance on competition, not to provide special protection from the immediate challenges of the economic cycle, with which every other airline has to deal with," says the Virgin chief.

Branson argues that the co-operation would inevitably lead to less competition, higher fares and place thousands of jobs under threat. He adds that together BA, American Airlines and Iberia would hold nearly half of all take-off and landing slots at London Heathrow Airport.

"BA-American Airlines would have a combination of high frequencies and a transatlantic network that could not be replicated by any other airline or alliance, and which would make it impossible for other carriers to compete for time-sensitive corporate or business travellers," says Branson.

Virgin claims BA and American will have a dominant position on six Heathrow-US routes: New York JFK, Chicago, Boston, Miami, Los Angeles and Dallas Fort Worth.

A British Airways spokeswoman declined to comment.