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."

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
PROMOTED VIDEO
Sport
Fans hold up a scarf at West Ham vs Liverpool
footballAfter Arsenal's clear victory, focus turns to West Ham vs Liverpool
New Articles
i100... she's just started school
News
news
News
ebooksAn unforgettable anthology of contemporary reportage
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Sport
football
New Articles
i100... despite rising prices
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam