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BA/AA’s plans would create a monster monopoly

Richard Branson: the BA/AA merger would be disastrous for passengers and employees

Sir Richard Branson warned of the dangers to consumers and businesses if regulators allow BA and American Airlines to merge unchecked. Final submissions to the Department of Transportation have to be made by today in order to express concerns about BA/AA’s plans, which would create a monster monopoly on key routes between London Heathrow and the US.

BA and AA, together with their Oneworld partners, would hold nearly half of all take-off and landing slots at London Heathrow. In comparison, Virgin Atlantic has just over 3 percent. BA/AA would also control most of the capacity on key routes such as Heathrow-Boston (80%); Heathrow-Miami (73%); Heathrow-Chicago O’Hare (64%) and Heathrow-New York JFK (64%).

Speaking at The National Press Club in Washington, Sir Richard said: “I’m here today to warn you that if the proposed merger between BA and American Airlines is allowed to go ahead then the result for passengers, employees, communities and for fair and healthy competition, would be disastrous. It doesn’t make sense to encourage even less competition by allowing dominant carriers to increase their stranglehold by setting prices together and agreeing schedules. I understand that it is tempting for regulators to say: “We’ve given dispensation to one alliance, we should do likewise for others” as they’ve done previously. But they must resist temptation. Each anti-trust application must be considered on its merits and…it’s clear that the application for a merger between BA and AA must be rejected.”

Sir Richard added: “Our arguments are as strong today as they were on the previous two occasions when BA and AA tried to merge. Their dominance has grown even further between then and now. It appears that 8 out of the top 10 US routes to Europe last year were Heathrow routes. That makes Heathrow very special indeed to US consumers. And they’re going to be feeling short-changed when suddenly there’s a lot less competition and higher prices on the routes to get there. What is before the regulators today is the future of a competitive international aviation industry. The latest BA/AA application isn’t about what the industry wants. It’s about what the consumer needs. It should not be decided on emotion or past letters of support. It should be decided on true facts. When this recession is over, we need an industry we can be proud of. An industry that promotes competition, creates jobs and brings real benefits to consumers.”

Also, Sir Richard unveiled a new poster campaign highlighting the true opinions of the former head of American Airlines. Bob Crandall, who was Chairman and CEO of AA when it first tried to merge with BA in 1996, recently said: "Any objective observer would have to look very hard to find a way in which alliances have benefited consumers." Bob Crandall’s latest views contrast strongly with comments he made when he was in office, when he claimed that there would be benefits for consumers."

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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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