Branson steps up war or words against BA/AA

Virgin Atlantic founder Sir Richard Branson has made a last-ditch warning over the implications of British Airways and American Airlines combining their transatlantic operations.

He flew to Washington DC ahead of Monday’s deadline for final submissions to the US Department of Transportation over the proposed tie-up.

Sir Richard warned that US travellers to Heathrow would be left “short changed” as prices rise due to a lack of competition if the BA/AA deal is allowed.

Virgin Atlantic claimed that BA and AA, together with their Oneworld partners, would hold nearly half of all take-off and landing slots at the London hub against its three per cent.

BA/AA would also control most of the capacity on key routes such as Heathrow-Boston (80%); Heathrow-Miami (73%); Heathrow-Chicago O’Hare (64%) and Heathrow-New York JFK (64%).

Sir Richard, speaking at The National Press Club in Washington, said: “I’m here today to warn you that if the proposed merger between BA and American Airlines is allowed to go ahead then the result for passengers, employees, communities and for fair and healthy competition, would be disastrous.

“It doesn’t make sense to encourage even less competition by allowing dominant carriers to increase their stranglehold by setting prices together and agreeing schedules.

“I understand that it is tempting for regulators to say: ‘We’ve given dispensation to one alliance, we should do likewise for others’ as they’ve done previously. But they must resist temptation. Each anti-trust application must be considered on its merits and….it’s clear that the application for a merger between BA and AA must be rejected.”

He added: “Our arguments are as strong today as they were on the previous two occasions when BA and AA tried to merge. Their dominance has grown even further between then and now.

“It appears that eight out of the top 10 US routes to Europe last year were Heathrow routes. That makes Heathrow very special indeed to US consumers. And they’re going to be feeling short-changed when suddenly there’s a lot less competition and higher prices on the routes to get there.

“What is before the regulators today is the future of a competitive international aviation industry.

The latest BA/AA application isn’t about what the industry wants. It’s about what the consumer needs. It should not be decided on emotion or past letters of support. It should be decided on true facts.

“When this recession is over, we need an industry we can be proud of. An industry that promotes competition, creates jobs and brings real benefits to consumers.”

by Phil Davies