Branson lambastes “lazy” EU over BA-AA tie-up

Branson lambastes “lazy” EU over BA-AA tie-up

Virgin Atlantic boss Sir Richard Branson has labelled Europe’s competition commissioners as “lazy” and “misguided” as he ramps up the campaign against the planned alliance between British Airways, American Airlines and Iberia.

The multi-billionaire is calling on Brussels to block the venture and would consider some form of legal action.

“The way the commission is currently going about it is fundamentally flawed and misguided, and, to be honest, it’s rather a lazy approach,” he told the Financial Times.

BA argues that the three-way agreement will benefit consumers by improving connections and flight schedules.

Branson has criticised the deal as “bad for passengers, bad for competition and bad for the UK and US aviation industry”.

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Last week BA and Iberia inked a merger that will create one of the world’s largest airline groups with 408 aircraft carrying more than 58 million passengers a year.

However the 25% foreign ownership legal restriction on US carriers is likely to rule out a formal tie-up between BA and AA.

The three carriers would avoid such restrictions by sharing revenues on routes and jointly managing schedules, capacity and pricing, but no stakes in the businesses would be exchanged.

In other news Branson could be dragged into the trial of four British Airways executives accused of price fixing.

According to the Times, lawyers on the case will raise the question of how much Branson knew about the collusion between his airline and BA in setting fuel surcharges between 2004 and 2006.

The two airlines have admitted collusion, but four BA executives will today go on trial at Southwark Crown Court in the first case under anti-cartel legislation introduced in 2003.

Virgin blew the whistle on the fixing in 2006, which granted both the airline and its executives immunity from prosecution.

The court case comes at a bad time for Sir Richard, who is trying to remain whiter than white as he mounts a bid for the Royal Bank of Scotland’s branch network and possibly Northern Rock when it goes on sale.