Branson attacks US anti-trust move on BA tie-up

Virgin Atlantic president says British Airways' merger with American Airlines will 'stick two fingers up' at consumers

Sir Richard Branson yesterday launched a scathing attack on the US Department of Transportation (DOT), labelling its decision to grant anti-trust immunity to the proposed transatlantic tie-up between British Airways and American Airlines (AA) as a "kick in teeth for consumers".

The comments come after the DOT gave provisional support to the merger, which was first mooted more than a decade ago, saying it would lead to lower fares, new routes and better schedules. The two airlines would maintain their own brands, but would pool revenue and, crucially for rivals such as Sir Richard's Virgin Atlantic, would be permitted to collude on prices.

The DOT decision gives opponents 45 days to raise further objections to the deal, which Sir Richard has described as a "monster monopoly".

Previous attempts to get competition authorities to grant permission for the deal, which would also include BA and American Airlines' Oneworld alliance partners Iberia, Royal Jordanian and Finnair, have floundered on the number of runway slots officials have asked the groups to surrender. The DOT has, however, agreed to give the airlines immunity in return for the companies giving up just four pairs of slots, a much lower number than expected.

"This preliminary decision beggars belief," Sir Richard said. "The DOT last time said that in order to address the competitive harms, hundreds of slot pairs had to be handed over permanently – absolutely nothing has changed since then. Four slot pairs is a complete joke and those responsible for this decision should hang their heads in shame."

The latest attempt to secure a merger gained added impetus when the "open skies" agreement, which allows any airline to fly between the European Union and the US, came into effect two years ago.

Despite the tentative approval for the deal, several hurdles still have to be overcome, not least sceptical EU competition authorities, which have already said the proposed deal may breach European competition rules.

Last October, the EU's anti-trust watchdog sent a so-called statement of objections to members of the Oneworld alliance. Similar deals, such as the Star and SkyTeam alliances, have been granted competition immunity, but BA and AA's agreement has attracted more attention as both have large market shares.

"The DOT's order is a key step in the process towards allowing Oneworld alliance members to co-operate more effectively in competing with the Star and SkyTeam alliances, both of which already have transatlantic anti-trust immunity," said BA in a statement. "Discussions with the European Union about seeking approval for the transatlantic joint business continue."

The decision by the DOT is likely to lead to an uptick in lobbying by those such as Virgin that oppose the deal.

"The US Department of Justice, who are the experts in competition issues, called for strict remedies to protect the public interest, because the alliance will blatantly harm competition and the consumer," added Sir Richard. "The Department of Transport[ation] has chosen to stick two fingers up at them. Millions of transatlantic travellers will be adversely affected if the alliance receives final approval.

"This draft decision is a real kick in the teeth for consumers and they will be paying the price for it for years to come. I urge the European Commission continue its more consumer-focused approach when it takes its decision in the coming weeks."

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific