Branson and BA in new clash

Randeep Ramesh

Transport Correspondent

The battle for the skies above the Atlantic reached a new pitch yesterday as the bosses of Virgin Atlantic and British Airways clashed over BA's plan to link up with American Airlines.

Richard Branson, chairman of Virgin Atlantic and one of the deal's most vociferous critics, told US Congressmen that the proposed alliance between BA and American was "one of the most outrageous developments in the history of air transportation". He said the two airlines were far too big to get together and a link would just put prices up.

Mr Branson was appearing in London before the influential US House of Representatives Committee on Transportation and Infrastructure, which was also meeting BA yesterday.

He also accused BA of having several secret agreements with other state carriers that would only come to light after the deal with American had gained government approval. "We believe that they have secret agreements with JAL [Japan Air Lines], Iberia [Spain's flag carrier] and KLM," said Mr Branson.

However Bob Ayling, the chief executive of BA, went on the attack by claiming that Virgin Atlantic was "afraid of new competition".

Mr Ayling said his deal would allow UK airports to be opened to all US airlines. "Virgin wants to maintain its cosy position at Heathrow with access denied to airlines such as Continental, US Airways, Delta, TWA and Northwest ... Virgin is afraid of increased competition."

The deal between BA and American, the world's largest airline in terms of sales, is already way behind schedule and has floundered in the face of regulatory pressures.

Karel Van Miert, the European Commissioner in charge of competition policy, has made it clear he will not endorse the deal in its current form. The price demanded by Mr Van Miert, which involves BA having to give up 350 take-off and landing slots at Heathrow, is too high for either airline.

For Mr Branson, who meets Mr Van Miert later today, slots are not the only issue. " I would also like to see a review of frequent flier programmes and airport capacity considered," he said. "Small carriers wishing to start transatlantic flights would find it impossible without access to the new mega-airlines' frequent flier programme."

Mr Branson also proposed a new mechanism to help ease the slot constraint at Heathrow. He believes that slots should be offered on a franchise basis, with government regulators letting them out to airlines who propose the most customer-friendly flights.

"It needs government intervention to bring about proper competition," said Mr Branson.

If the new Labour government - with which Mr Ayling has links - refuses to challenge Brussels, many analysts believe BA will revert to a marketing alliance with American and bide its time for a full partnership.

BA would calculate that eventually, the pressure to open the skies over Europe would become so great that it could win clearance without having to bow to Mr Van Miert.

The US Congressional committee's deliberations are part of the overall American investigation into the alliance, although the key ruling will come from the European Commission.

Start your day with The Independent, sign up for daily news emails
Voices
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appeal
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
Sport
Ched Evans in action for Sheffield United in 2012
footballRonnie Moore says 'he's served his time and the boy wants to play football'
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture