Branson slams alliance
The Australian and AFP report that Virgin Atlantic boss Richard Branson has written to US presidential candidates Barack Obama and John McCain to warn against a potential alliance between British Airways and American Airlines.
British Airways had said last week that it was holding talks with Iberia of Spain and American Airlines about “increased co-operation” for their transatlantic operations and would seek US regulatory approval.
However, Virgin Atlantic president Sir Richard has slammed the plans as “anti-competitive,” according to excerpts from his letter that were published by the carrier on Monday.
“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 will inevitably lead to less competition and higher fares,” Sir Richard wrote in the letter to senators Obama and McCain.
“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.”
A combination of American Airlines, BA and Iberia would have almost half the takeoff and landing slots at London’s Heathrow airport, he said.
Virgin Atlantic, a key competitor in the lucrative market for flights between Britain and the US, is 51-per cent owned by Sir Richard’s Virgin Group. Singapore Airlines holds the remaining 49 per cent.
British Airways, meanwhile, is currently in merger talks with Iberia to create the third largest airline in the world in terms of income, with more than E16.5 billion ($28 billion).
A Report by The Moel from The Australian and AFP
John Alwyn-Jones
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