BRANSON CALLS ON PRESCOTT TO STAND UP TO AMERICAN THREAT

Richard Branson today appeared before the Transport Select Committee to give evidence on the forthcoming US/UK “Open Skies” talks.

He reiterated Virgin Atlantic’s commitment to a complete liberalisation of the transatlantic aviation market and his desire to see all unnecessary regulations removed once and for all. No other mature industry is as restricted and in no other domestic industry has the United States maintained such an impenetrable trade barrier preventing airlines like Virgin Atlantic from operating there.

Richard Branson called upon John Prescott, the Deputy Prime Minister and Secretary of State for Transport, to continue to stand up to the bullying tactics of the US administration and to reject their one-sided deals. He attacked the “mini-deal” proposal which would surrender Heathrow to American carriers on the basis granting anti-trust immunity to two alliances (BA/AA and British Midland/United). In effect both alliances would be given permission to collude on fares and would stop actively competing against one another.

Mr Branson also accused British Midland of hypocrisy in their recent lobbying campaign which claimed that fares across the North Atlantic are higher from the UK than Europe. Richard Branson highlighted how British Midland’s European pricing policy does not stand up to close scrutiny.

This Monday their cheapest day return fare from Heathrow to Brussels was £326 while at the same time Virgin Express were offering £106 fares. Meanwhile, more damningly, on the same day the cost of a return flight to New York on Virgin Atlantic was £333 – just £7 more for a flight 6,500 miles longer!

Finally, Richard Branson talked about the threat to UK regional services. In order to add more services across the North Atlantic BA has already ended services from Heathrow to Inverness, Plymouth, Jersey and Guernsey. Fares on UK regional services are already high as there are seldom more than two carriers on any route.

If this deal goes through, the only way additional US services will be launched is at the expense of regional services. Richard Branson predicted the complete withdrawal within five years of all services from Heathrow to Edinburgh, Glasgow and Manchester.