BA stranglehold on flights to India broken by CAA competition ruling

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The Independent Online

Competition on key air routes between the UK and India is to increase after a ruling yesterday from the industry regulator, the Civil Aviation Authority, that breaks British Airways' stranglehold over the market.

Competition on key air routes between the UK and India is to increase after a ruling yesterday from the industry regulator, the Civil Aviation Authority, that breaks British Airways' stranglehold over the market.

The CAA said it had decided to divide up 21 new frequencies from Heathrow to India among all three airlines which had applied for them ­ British Airways, Virgin Atlantic and bmi.

The ruling means that BA, the dominant operator from the UK to India, will now face competition from rival UK carriers. Both Virgin and bmi will fly the Mumbai route, while Virgin has secured the right to start its own daily service to Delhi. The ruling also marks the first time that bmi has been granted rights to fly from its hub airport of Heathrow to India.

Of the 21 new flights available, 10 will go to Virgin, seven to BA and 4 to bmi. The Virgin chairman Sir Richard Branson immediately announced it would appeal on the grounds the carve-up would still leave BA "utterly dominant" on Indian routes.

BA, which had asked the CAA to grant it all 21 new frequencies on the basis that it would make best use of them, said it would study the ruling and might well continue to argue the case for more capacity to India.

Rod Eddington, BA's chief executive, said: "The CAA's remit was to award the frequencies to the airline that could bring maximum benefits to consumers and to the UK economy. We believe we were best placed to do that."

Sir Michael Bishop, the chairman of bmi, said he was delighted, adding that consumers would now see "genuine competition in action".

The additional services will be phased in over the next 12 months. Virgin will be able to launch a daily service to Delhi and three services a week to Mumbai, while bmi will serve Mumbai four times a week.

BA, which already flies to Delhi, Mumbai, Madras and Kolkata, has been granted the right to increase its Madras service to five times a week and start a new three-times-a-week service to Bangalore. It had wanted the right to fly twice daily to Delhi and Mumbai.

The hearings before the CAA last month were notable in that the heads of all three airlines appeared in person to give evidence on behalf of their airlines ­ a reflection of how lucrative services to India are. BA makes £80m profit a year alone from the Delhi and Mumbai routes.

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