V Australia drawn into Virgin/British Airways row

LONDON - British Airways has accused Sir Richard Branson"s Virgin Atlantic of having double standards in attempting to torpedo a move allowing anti-trust immunity for BA and American Airlines.

Sir Richard will take his campaign against the planned BA/AA deal to US Congress next month when he appears before the House of Representatives Judiciary Sub-committee on Competition Policy

The UK Daily Telegraph reports that the Virgin founder is expected to reiterate his view that granting anti-trust immunity to BA/AA will allow the creation of a "monster monopoly", giving the pair an unassailable position on flights between Heathrow and the US.

Willie Walsh, the BA chief executive, has already accused Sir Richard of sounding like a "broken record" in his continued opposition to the tie-up, but the UK flag-carrier has become even more incensed following a Virgin associate's application for its own anti-trust deal.

Virgin Blue, the Australian carrier in which Sir Richard retains a stake of around 26pc, is seeking immunity for a joint venture with US carrier Delta Air Lines that would "expand both carriers' reach between the US and Australia and the South Pacific".

Virgin Blue is seeking the joint venture for V Australia, its new carrier that is facing heavy opposition on the Pacific route from Qantas, United and Delta.

Virgin Blue/Delta said that together they would "be a stronger competitor by offering consumers greater choice of destinations", although the deal is being opposed by Tiger Airways in Australia and Air New Zealand.

Singapore Airlines, which has tried unsuccessfully to be allowed onto the Australia-US West Coast route, said in a submission to the Australian Competition and Consumer Commission, "If a partnership between airlines leads to fewer flights or an artificial floor on fares … then it begs the question if consumers would be better off from such an arrangement."

A BA spokesman noted how BA and AA had cited such consumer benefits for their own proposed tie-up.

"We are pleased that Virgin airlines in the southern hemisphere now agree that anti-trust immunity deals can be beneficial for consumers and competition," he said.

"We look forward to this view being maintained by Virgin carriers north of the equator."

Paul Charles, Virgin Atlantic spokesman, told the Daily Telegraph the two proposed tie-ups could not be compared.

"BA/AA is on a completely different scale and is all to do with dominating Heathrow," he said.

Tuesday, August 11, 2009

• PRINT
• SEND TO A FRIEND