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American Airlines - British Airways Alliance

Virgin repeats calls to US to halt AA-BA alliance

Marietta Cauchi  Jan 13, 2010

LONDON - Virgin Atlantic Airlines on Monday repeated its calls to the U.S. Transportation Department to reject the proposal of AMR Corp.'s American Airlines and British Airways PLC for an alliance as "anticompetitive."

The renewed calls come in Richard Branson's airline's written response submitted to the U.S. authority earlier Monday in relation to the U.S. Department of Justice's comments last month about the planned alliance. The Justice Department said the alliance would harm competition on the most significant trans-Atlantic routes.

"Both the authorities on opposite sides of the Atlantic have cited concerns," said Branson, Virgin's president. "These concerns are absolutely justified and the alliance should not be given the go-ahead ... Virgin Atlantic urges the Department to deny the application outright."

Last October, the European Commission issued its Statement of Objections and stated that the proposed alliance may be in breach of European rules on restrictive business practices.

British Airways has said it also will respond Monday to the U.S. Department of Justice's concerns.

BA and American Airlines are seeking antitrust immunity to form a joint venture to coordinate trans-Atlantic flights. In December, the U.S. Justice Department said the two airlines, which are part of the oneworld alliance, need to make concessions if they are to win ATI status on their third attempt. Granting ATI status would allow the two carriers to bypass monopoly laws, work more closely on scheduling and fares, and share revenue on certain routes.

The Justice Department also said granting U.S. ATI status to the carriers could result in "competitive harm" on six trans-Atlantic routes if allowed in its current form. However the U.S. Department of Transportation has final say on airline competition policy.

Virgin repeats calls to US to halt AA-BA alliance
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Source: Dow Jones Newswires

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