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Virgin Atlantic Continues to Oppose BA/AA LinkJanuary 13, 2010 By: George Dooley
Virgin Atlantic Airways continues to urge the Department of Transportation (DOT) to reject proposals by American Airlines and British Airways to link up, calling the proposed BA/AA alliance anti-competitive.
“ BA/AA will use their exemption from competition laws and their overwhelming dominance to destroy competition, raise prices and reduce choice,” Virgin said. “ BA/AA will have a monopoly or be dominant on some of the busiest and most profitable routes between the U.S. and Heathrow.”
Virgin Atlantic said it found encouragement in a recent Department of Justice (DOJ) comments to the DOT that argued the proposed alliance could harm the competitive balance on transatlantic routes.
Sir Richard Branson, Virgin Atlantic founder and president, said that regulatory authorities in both the UK and U.S. cited concerns and urged disapproval of the BA/AA link. "These concerns are absolutely justified and the alliance should not be given the go-ahead," he said. "Virgin Atlantic urges the Department to deny the application outright."
“The DOJ expressed a number of grave concerns over the competitive and consumer harms of the proposed BA/AA alliance," Virgin said. "This is not the first time a competition authority has set out concerns regarding the proposals. In October of 2009, the European Commission issued its Statement of Objections and stated that the proposed alliance 'may be in breach of European rules on restrictive business practices.' ”
BA and AA have vigorously urged approval of antitrust immunity to form a joint venture to coordinate transatlantic flights. The Justice Department said the two airlines, which are part of the oneworld Alliance, need to make concessions if they are to win anti-trust immunity.
Virgin counters that the DOJ’s comments supported Virgin‘s position, saying "Applicants' proposed alliance would significantly harm competition on the most significant transatlantic routes... [and] the likely magnitude and value of any of these alleged benefits is overstated."