Virgin Atlantic chief Sir Richard Branson has condemned a suggested tie-up between British Airways and American Airlines as “anti-competitiveâ€.
He has written to the two US presidential candidates Barack Obama and John McCain claiming that the proposed alliance would “severely damage competition†on transatlantic routes.
Sir Richard’s warning came in advance of BA’s likely application to US authorities for anti-trust approval for a joint venture with American that would allow revenue and profit sharing on routes between the UK and US.
A similar bid by BA has failed twice in the past but the carrier believes the advent of EU-Us open skies has changed the aero-political environment.
But Sir Richard said: “Airlines everywhere are struggling with the current price of oil, but the solution to their problems should not lie in an anti-competitive agreement, which would inevitably lead to less competition and higher fares.â€
He claimed that BA and American together with new BA partner Iberia, would hold nearly half the take off and landing slots at Heathrow.
“BA and AA will argue that their alliance is now acceptable because the competitive environment has changed with the open skies accord on UK-US routes,†said Sir Richard.
“This is a complete red herring. Open skies has not significantly increased competition on UK/London-US routes. Open skies hasn’t reduced ticket prices either.â€
The Virgin founder said that BA-AA would have a dominant market share in terms of capacity on routes from Heathrow to New York JFK (63%), Chicago (66%), Boston (82%), Miami (72%) and Dallas Fort Worth (100%).
“BA-AA would have a combination of high frequencies and a transatlantic network that could not be replicated by any other airline/alliance, and which would make it impossible for other carriers to compete for time-sensitive corporate or business travellers,†argued Sir Richard.
Virgin is to unveil a lobbying and advertising campaign to highlight to regulators why a BA-AA and Iberia alliance should be blocked.
by Phil Davies
