Business | Aviation
Virgin warns against planned BA-American deal
Virgin Atlantic Airways president Richard Branson has written to both US presidential candidates to warn that a proposed alliance between British Airways and American Airlines would severely damage competition on trans-Atlantic routes.
- AP
- Published: 23:22 August 11, 2008
London: Virgin Atlantic Airways president Richard Branson has written to both US presidential candidates to warn that a proposed alliance between British Airways and American Airlines would severely damage competition on trans-Atlantic routes.
Branson said yesterday that a closer relationship between the two carriers would result in higher prices for customers and job losses on both sides of the Atlantic.
He added it was "very dangerous" to believe that consolidation was the best response to the current difficult econ-omic conditions.
"Just because life is tough out there, you shouldn't rid yourself of competition," Branson told BBC radio after releasing details of the letter to Senators Barack Obama and John McCain.
BA, which is already in talks with Spain's Iberia SA over a merger, said last week that it expected final preparations for a deal with AMR Corp's American, the world's largest carrier, to be completed within weeks. An application to US regulators for antitrust immunity would be filed shortly afterward, it added.
It declined to comment further on its progress yesterday.
BA and American have failed in the past to win an exemption from US competition laws to work more closely together because of their dominance at London's Heathrow, where the pair have more than half the capacity to and from the US.
However, they are expected to argue that the competitive situation has changed since the "open skies" agreement between the US and the European Union came into force in March, allowing airlines to fly to and from any point in the US and any point in the EU.
Strict airline ownership laws in the United States all but rule out a full merger between BA and American Airlines.
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