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Virgin Atlantic's latest submission to the US Department of Transportation

BA and American Airlines are blind to their own dominance at Heathrow

Virgin Atlantic highlighted the contradictions and lack of consumer benefits in BA and American Airline‘s proposals to effectively merge. In its latest submission to the US Department of Transportation, Virgin Atlantic said: "The constraints and conditions at Heathrow are unique to this case which threatens significant consumer harm. The Oneworld alliance is bigger and more dominant than Star and Skyteam in the critically-important US-Heathrow markets."

Sir Richard Branson, President of Virgin Atlantic, said: "BA and AA are trying to manufacture some consumer benefits by distracting the Department of Transportation with so-called letters of support. Isn’t it strange how the letters are virtually identical to the letter template on the airlines’ own website? Any purported theoretical consumer benefits are unquestionably overwhelmed by the very real threat to competition from these proposals. Rivals would be squeezed and prices would rise."

"The BA/AA chameleon is on full display to the regulators. For years, American Airlines objected to anti-trust immunity applications by competing alliances but has  developed amnesia now that it is a proponent of its own deal."
 
In its submission, Virgin Atlantic sets out why Heathrow is such a critical factor in BA/AA’s proposals: "We object to this particular alliance application due to the overwhelming market power that Oneworld would have on US-Heathrow routes. Even BA recognises this and has expressed an interest in stockpiling slots. Comparisons across alliance hubs in Paris and Frankfurt are meaningless."

BA already has the largest share of peak-hour slots at Heathrow, which enables the airline to achieve the optimal schedule for flights into and out of Heathrow. The submission quotes comments from the slot co-ordinator at Heathrow, ACL, who themselves state: "At Heathrow, pool slot allocations will not achieve any significant new entry" and "new entrant airlines still need to be flexible about the timing of slots and accept commercially suboptimal timings."
 
Virgin Atlantic is also highlighting to the DoT some strange cases of BA/AA double-speak. While other carriers which don’t have anti-trust immunity have successfully added nine new EU-US routes since 2006, BA and AA are claiming that approving anti-trust immunity will enable them to bring consumer benefits by starting a new route between Madrid and Dallas Fort Worth – a route which has in fact already started, without ATI approval in place, last month.

The European Commission has opened a wide-ranging investigation into BA and AA’s proposals and the Department of Transportation is expected to make a decision by the end of this year.

BA and AA have tried twice before, and failed, to get anti-trust immunity.

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Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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