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Sir Richard Branson Slams Airline Deal

Virgin boss: BA/AA? No way!  Aug 18, 2008

Virgin Atlantic owner Sir Richard Branson has launched a broadside at rivals British Airways, American Airlines and Iberia claiming a merger of the businesses will harm customers.

The billionaire entrepreneur warned that if BA managed to complete its merger with the US carrier at the third time of asking, it would create a 'monster monopoly' that could push up ticket prices and damage competition in the UK.

In a scathing statement, Branson said: 'If this monster monopoly is approved it will be third time unlucky for consumers. It will still be bad for passengers, bad for competition, and bad for the UK and US aviation industry.'

Branson said the deal would give the combined organisation dominance across many of the lucrative US/UK routes, including Heathrow to New York/JFK and Heathrow to Boston.

He added: 'The current economic slowdown is also no justification for agreeing to this alliance. The job of the regulators is to assess the long-term impact of the alliance on competition, not to provide special protection from the immediate challenges of the economic cycle, with which every other airline has to deal.'

Branson attacked the rival carriers after BA, AA and Iberia announced Thursday that they intended to file an application with the US Department of Transportation seeking antitrust immunity to cooperate more closely on transatlantic flights.

The airlines, all part of the Oneworld global airline alliance, said they planned to co-operate commercially on flights between the US, Mexico and Canada, as well as the European Union, although they would remain separate companies.

Branson said BA/AA and Iberia combined would be 'unacceptably dominant', having nearly half of all the flight slots at the UK's biggest airport under their command, and would leave competitors powerless to take them on.

BA's shares jumped yesterday following the announcement, and were up again today, ahead by 2.3% at 259.5p by 11:41am.

Virgin boss: BA/AA? No way!

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