RICHARD BRANSON ATTACKS BA/AA’s ANTI-COMPETITIVE MERGER

Sir Richard Branson, Chairman of Virgin Atlantic Airways, today attacked British Airways and American Airlines’ proposed merger:

“This proposal was withdrawn three years ago and nothing has changed since then. We will fight it tooth and nail. This is no normal codeshare application – BA and AA are applying for anti-trust immunity quite simply because they want to act anti-competitively. Between them they control over 60% of the Heathrow-US market, 100% on several key routes and around 70% of peak-time slots used for North Atlantic services. If they’re given anti-trust immunity to operate on some of the busiest set of routes on the planet they will collude to:

- use their overwhelming dominance to destroy competition,

- raise prices, and

- reduce service.

“This announcement is a slap in the face for the Government in the light of its recent policy statements on free trade and competitiveness. I’m confident that our Government together with the US and European regulators will see through this announcement and give it the short shrift it deserves.

“There are numerous anti-competitive ways in which a dominant airline, or alliance, can behave: travel agency discounts, corporate deals, predatory fares, capacity dumping, misuse of computer reservation systems, and so on. All of these methods have been used in the past, as we all know, to force smaller airlines out of business.”