Virgin challenges BA and American Airlines team up
August 11, 2008
Virgin Atlantic boss Sir Richard Branson has written to both senators Barrack Obama and John McCain, warning that a deal between British Airways and American Airlines would damage transatlantic competition and customers would lose out.
Certain reports have said that BA is prepared to sacrifice “hundreds” of transatlantic flight to allow the deal to go ahead.
BA have tried to make a deal with American Airlines twice before but had refused to meet US authority demands that it gives up a large number of flight slots.
The Mail on Sunday have now reported that BA now thinks this is a price worth paying and have said the carrier will make an offer to the US Department of Justice officials this week.
BA also believes that the Open Skies agreement will make this merger more likely.
In the letter to the US presidential candidates, Sir Richard Branson said that the solution to the problems of airlines “should not lie in an anti-competitive agreement which will inevitably lead to less competition and higher fares”.
Routes from London Heathrow - including New York JFK, Chicago and Los Angeles - would be taken over by a BA American Airlines merger, said Sir Richard.
Ha added that the argument that the competitive environment had changed with the introduction of the Open Skies agreement was “a complete red herring”.
He also said that there had not been any significant increase in competition and that ticket prices had not fallen.
BA is also in merger talks with Spanish airline Iberia.
The carrier also suffered an 88% drop in profits between April and June and has said that the whole industry was facing the worst period in its history.
BA already works with American Airlines but it is thought that if the merger deal goes through the two airlines would work more closely together to cut costs in department such as administration, technology and ticketing.
Comments
Got something to say?
Advertisement