Air inquiry begins with fireworks
Thursday 11 July 1996
The charge followed a warning from BA that unless the tie-up was approved without strings then the UK would pull out of talks aimed at reaching an open skies deal across the Atlantic.
Appearing before the Commons Transport Select Committee the Virgin chairman said that if the link-up was allowed to proceed it would kill competition and mark a return to the bad old days of state-protected monopolies.
However, BA chief executive Robert Ayling, who gave evidence earlier, dismissed Mr Branson's claims as "myths", insisting that the reality would be more competition, lower fares and a better deal for travellers.
Mr Ayling also rejected any suggestion that BA and American should be required to give up precious take-off and landing slots at Heathrow as the price of regulatory approval for the alliance or offer any other concessions.
However, claiming that the alliance would control 60 per cent of the transatlantic market and 100 per cent of passengers on some UK-US routes, Mr Branson said: "Any appeal by BA that it needs to enhance its already monopolistic position to compete on the world stage is pure emotional blackmail. As it is BA already has monopoly power on the North Atlantic. With American Airlines it will simply kill competition."
In its evidence to MPs, BA argued strongly, however, that the real market place was between Europe and the US. On that basis, the alliance would account for only 24 per cent of passengers between the UK and US since more than half its traffic was from outside the UK.
BA and Britain, Mr Ayling added, risked losing out to foreign airlines and airports in Frankfurt, Amsterdam and Paris, jeopardising a business that employed 50,000 people and had contributed pounds 9bn to the balance of payments in the last five years.
If the alliance with BA did not take place other airlines such as Air France were waiting to step in and take American's hand. "We are not the only bride in town," said Mr Ayling
But Mr Branson rejected BA's claims, saying: "The question here is not whether our aviation industry is to be allowed to continue to play in the first division by further globalisation of BA. It is whether our industry is to be allowed to slip back into the the bottom division characterised by state protection, monopolies and cartels."
The inquiry is just one of four probes into the BA-American alliance. The Office of Fair Trading in this country and the US Justice Department are also investigating and the European Commission has announced it is to review all existing transatlantic alliances including the proposed BA deal.
Comment, page 21
- 1 Tourist films plane's descent just metres above packed Caribbean beach
- 2 Indian woman creates 'Marriage CV' after parents put her on dating site: 'Definitely not marriage material. Won’t grow long hair, ever'
- 3 World Book Day: Boy 'excluded' from school after dressing up as Fifty Shades' Christian Grey
- 4 Bad Jews poster 'censored' on London Tube
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Tourist films plane's descent just metres above packed Caribbean beach
Indian woman creates 'Marriage CV' after parents put her on dating site: 'Definitely not marriage material. Won’t grow long hair, ever'
Isis 'bulldozes' Nimrud: UNESCO condemns destruction of ancient Assyrian site as a 'war crime'
Professor Brian Cox brands astrology-believing Tory MP David Tredinnick an 'outlier on the spectrum of reason'
Lynch mob kills suspected rapist in India after dragging him naked for four miles through city
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Durham Free School: 'Creationism taught at' free school facing closure
End of the licence fee: BBC to back radical overhaul of how it is funded
Elif Shafak: Turkish author warns against rise of British nationalism
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
iJobs Money & Business
£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...
£8 per hour: Recruitment Genius: This Pension Specialist was established early...