Letter:Branson against the oligopolists

Sir: Professor Doganis' time as chairman of state-owned and subsidised Olympic Airways appears to have done little to improve his understanding of the importance of competition in air transport and the need to protect the interests of consumers (Letters, 18 June).

He professes not to comprehend the difference between the proposed merger between British Airways and American Airlines and the co-operative agreement signed in 1994 between Virgin Atlantic and Delta Airways, and accuses me of crying foul because someone has put together a bigger alliance than ours.

One obvious difference is that BA is, by its own admission, the largest international scheduled airline in the world. It will be merging with the world's second largest international and domestic airline. Together they will control over 60 per cent of air traffic between the UK and US, and even higher shares on some individual routes. How can anyone seriously compare the impact on competition and consumer choice of such a merger with any deal involving Virgin Atlantic?

The second important difference is that our arrangement with Delta was not a merger. We sell blocks of seats to Delta, who then compete with us in the marketplace. We are not allowed to collude on prices and unlike BA and American we have not sought exemption from the competition laws in Europe or the US to do so.

When approving the Virgin Atlantic/Delta alliance both the UK and US governments recognised that it would increase competition on the North Atlantic, not reduce it. I challenge anyone to prove that the same is true for the BA/American merger.

RICHARD BRANSON

Chairman

Virgin Group of Companies

London W8