Branson takes BA tie-up fight to Europe

Virgin founder attacks rival's efforts to smooth sign-off of American deal

British Airways' concessions to Europe's competition watchdog over its proposed tie-up with American Airlines (AA) were derided by Sir Richard Branson as "woefully inadequate" yesterday.

In an effort to address monopoly concerns raised by the European Commission last September, BA is offering to lease out four daily pairs of take-off and landing slots between the UK and the US – two to Boston and one each to Dallas and Miami – plus another two to New York that could be included "at some point in the future".

But Sir Richard, pictured below, who is the president of BA rival Virgin Atlantic and has campaigned vociferously against the BA/AA plan, claims that if the revenue-sharing agreement gets the go-ahead, it will destroy competition, raise prices and reduce choice on some of the busiest routes between Heathrow and the US.

BA's latest offer to give up some take-off slots does not go far enough to address such concerns, according to Virgin Atlantic. The proposed alliance, which also includes Spain's Iberia (with which BA is in the process of merging), would, they say, still constitute a "monster monopoly" with an "overwhelming dominance".

Sir Richard met with Joaquin Almunia, the EU Competition Commissioner, this week to press Virgin Atlantic's arguments on the subject. "The proposals are woefully inadequate in counteracting the anti-competitive harm of a combined BA/AA," Sir Richard said. "I continue to question why the Commission is even considering these proposals to try to put right the consumer harm of this monster monopoly when it does not seem to have any evidence of concrete consumer benefits. You can't remedy the irremediable."

The proposals "fall far short of what is necessary" and Virgin Atlantic will use the time until the closure of the market-testing consultation on 10 April to fight its corner. "Consumers on both sides of the Atlantic are relying on the European Commission to protect their rights," Sir Richard said. "We will continue to work with the commission to help them recognise the potential damage BA/AA could cause as the new commissioner gets to grips with this important issue."

BA denies Virgin Atlantic's charges. The flag carrier maintains that the plan – which includes shared revenues and jointly managed schedules, pricing and capacity on transatlantic routes – will give customers cheaper fares, more connections and better access to a bigger network. It is also vital for the 11-carrier Oneworld alliance of airlines to compete with global rivals who already have already had transatlantic links signed off by competition authorities on both sides of the pond.

Willie Walsh, the chief executive of BA, said: "We've offered to lease slots to gain European Commission approval for our joint business which will bring benefits to our customers, shareholders and employees. It will also enable Oneworld to compete on a level playing field with the other global alliances across the Atlantic."

The economic slowdown and the Open Skies Treaty liberalising flights between Europe and the US is causing massive disruption to the global airline industry, including an expansion in scope of the three main alliance groupings. Oneworld is still dwarfed by its rivals. The Star Alliance, which includes Lufthansa and US Airways, is more than twice its size. And although Skyteam, which includes Air France and Delta, has fewer members, it has the greatest number of routes. Crucially, both Star Alliance and Skyteam already have monopoly immunity on transatlantic flights.

The BA/AA plan is also under consideration by the US Department for Transportation for the formal anti-trust immunity (ATI) status. Last month, an initial ruling from the DoT stipulated that BA/AA must give up four pairs of slots, two to Boston and two to destinations elsewhere in the US. The proposals are now subject to a 45-day public consultation, after which BA gets another 15 days to respond to any points raised.

Signs of life: BAA traffic rises

The aviation industry may at last be showing signs of recovery. BAA saw traffic at its six British airports grow for the first time in two years last month. Some 7.13 million people travelled through its facilities in February, a 2.4 per cent rise on February 2009.

Heathrow was the high point. The London hub escaped the worst of this year's snow and traffic was up by 5.3 per cent. Even adjusted to take account of the effect of last year's winter weather, Heathrow's traffic was still up by 2.7 per cent.

At BAA's smaller facilities the picture was less rosy. Some 4.5 per cent fewer passengers used Stansted, Glasgow was down 5 per cent and Aberdeen by 4.6 per cent.

BAA's chief executive Colin Matthews said: "Heathrow remains resilient and other airports are beginning to see encouraging signs. However, traffic remains depressed, reflecting tough conditions in the economy generally and in aviation specifically."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
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

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created