Morning:
13°c
Virgin asks Brussels to ban BA and AA tie-up
Robert Lea26.11.08
Virgin Atlantic took its latest fight with British Airways to Brussels today, saying the UK flag carrier's proposed tie-up with American Airlines (AA) would wipe out competition at Heathrow and raise fares for passengers.
BA is planning an alliance with the giant of the US industry, AA, which would see passengers seamlessly and freely switch between each carrier's services and networks - "interlining", in the jargon of the industry.
However, Virgin's Sir Richard Branson, a veteran of countless battles with BA's incumbent power at Heathrow, says the deal is a "virtual merger".
In a submission to the European Commission, Virgin says a BA/AA tie-up would give the two airlines:
* renewed dominance at Heathrow
* market power to raise fares
* the ability to adjust schedules to keep out competitors
* the chance to cut off connecting feeder traffic to the smaller carriers;
* a dominant "frequent flyer" programme which no other airline could replicate.
"We urge the European Commission to reject outright this third attempt by BA and AA to stifle competition between Heathrow and the US," said Virgin Atlantic chief executive Steve Ridgway, delivering the submission.
BA said the deal would provide more-efficient services.
