Richard Branson dubs BA, American, Iberia partnership a " monster monopoly"
16 Aug 2008
London\ New York: With UK-flag carrier British Airways, America's largest carrier, American Airlines and Spanish flag carrier, Iberia, announcing a "joint business agreement," which would cover flights between North America and Europe, Virgin Atlantic president, Sir Richard Branson has gone the offensive, dubbing the partnership "a monster monopoly."
Sir Richard, president of Virgin Atlantic, said the proposed tie-up would "create a monster monopoly that would push up ticket prices and substantially reduce competition on the busiest air corridor in the world".
According to Branson, the BA/AA/Iberia would be "unacceptably dominant, with nearly half of all of the slots at Heathrow, leaving competitors powerless to take them on".
He also questioned the main rationale for the move, as presented by the airlines, saying an industry slowdown was "no justification for agreeing to this alliance".
Early on in the week, the two European and the American carrier had said that they intended to co-operate commercially on flights between the US, Mexico and Canada, and the European Union, Switzerland and Norway even as they continued to operate as separate legal entities. They said revenues would be shared, but not profits.
AA, BA and Iberia are now to apply for anti-trust immunity from the US and European competition authorities for their trans-Atlantic joint venture. Approval by regulatory authorities in Washington and Brussels would allow them to jointly arrange capacity, networks, pricing and sales.
They could also combine frequent flyer programmes.
BA and Iberia have recently announced their intentions to merge.
