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Virgin Atlantic, one of the world’s leading long-haul airlines, has submitted new evidence to the US Department of Transportation (DoT) in relation to BA’s third attempt to tie-up with American Airlines.
Comments from third parties had to be submitted by close of business last night, with the DoT due to make a decision about the case by the end of October.
Sir Richard Branson has said the effective merger of BA and AA would create a “monster monopoly”, with BA locking out competition and having a stranglehold on some of the busiest routes in the world into and out of London Heathrow.
In its submission, Virgin Atlantic says: “BA and AA assert that their alliance will create significant public benefits (yet) many of these benefits are either illusory or do not require an extraordinary grant of immunity in order to be implemented. The application is structured primarily to protect “Fortress Heathrow” and to discourage, not encourage, the introduction of new capacity and innovative fares.”
BA already has 41% of take-off and landing slots at Heathrow, compared with Virgin Atlantic’s 3%. If the application for anti-trust immunity is approved, BA and its Oneworld partners would have nearly half of all slots. Its size at Heathrow, which was the base for 8 out of the top 10 US routes to Europe last year, would continue to dwarf the slots held by two other alliances, Star Alliance and SkyTeam.
Virgin Atlantic’s submission highlights that little has changed since the Open Skies agreement came into effect last year: “BA and American still retain a dominant share of frequency in the routes they overlap on (such as Heathrow-New York JFK, Heathrow-Boston, Heathrow-Chicago, Heathrow-Miami and Heathrow-LA).
“Heathrow constitutes a separate market to other London airports… Heathrow has a richer and bigger catchment, higher yields and an abundance of connecting flights with carriers from all alliances and carriers which are not aligned.
“BA and American would be able to use their market power to raise fares, lessen service levels and inhibit innovation. The virtual monopoly would threaten the services of the remaining competitors in the relevant markets, and especially the services of the carriers that operate on the overlap routes.”
BA/AA would dominate with most of the capacity on key routes such as Heathrow-Boston (80%); Heathrow-Miami (73%); Heathrow-Chicago O’Hare (64%) , Heathrow-New York JFK (64%) and Heathrow-Dallas (100%)
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
