12 January 2010

Branson joins chorus of disapproval over AA/BA alliance

Virgin Atlantic president Sir Richard Branson has voiced his disapproval of the proposed British Airways and American Airlines alliance, underlining that authorities from both sides of the Atlantic have now ruled the move uncompetitive.

Virgin Atlantic would suffer considerably under any such new alliance as BA and AA would monopolise Heathrow’s transatlantic slots.

It is also argued that the alliance would be bad news for the consumer as prices would rise without any effective competition.

Last year the European Commission and the US department of Justice expressed concerns about the alliance and its anti-competitive outcome.

Said Sir Richard: "Now two competition authorities have voiced their concerns over the proposed BA/AA alliance, we renew our call on the regulators to reject these anti-competitive proposals.

"The competition authorities have thoroughly scrutinised the proposals in an effort to safeguard competition in the interests of consumers. Having done so, both the authorities on opposite sides of the Atlantic have cited concerns. These concerns are absolutely justified and the alliance should not be given the go-ahead."

Virgin Atlantic claims that if the alliance were allowed, BA and AA would control 80% of capacity from Heathrow to Boston, 100% to Dallas Fort Worth, 62% to New York JFK, 48% to Los Angeles, 70% to Miami and 68% to Chicago.

By Dinah Hatch

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Your Comments (2)

Why should he worry?

I can't understand why Sir Richard should be upset. His airline doesn't even reply to complaints within the ridiculous 28 days "turn-around" that they tell you. Go and find another hobby- horse Sir Richard!

By James Parker, Wednesday, January 13, 2010
Would he still shout 'thief' if HE had the dominant position?

"Monopolies are neither good, nor bad - they have the potential to be both. A monopoly is good if you have it, and bad - if someone else has it." Not sure who this quote is attriuted to (some 20-th century economist or business leader) - but it rings true every time we hear such debates. Competition is always good for the consumer, but the latter has no voting rights in the debate :( And,among the debating parties, the pro-monopoly one (because of the benefits to itself) usually has lots of (sometimes hidden) power.

By Leonard Bix, Wednesday, January 13, 2010