BA and American Airlines blind to dominance at Heathrow

Virgin Atlantic, one of the world’s leading long-haul

airlines, today highlighted the contradictions and

lack of consumer benefits in BA and American

Airline’s proposals to effectively merge. In its latest submission to the US Department of

Transportation, Virgin Atlantic said: “The

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constraints and conditions at Heathrow are unique to

this case which threatens significant consumer harm.

The Oneworld alliance is bigger and more dominant

than Star and Skyteam in the critically-important

US-Heathrow markets.”

Sir Richard Branson, President of Virgin Atlantic,

said:


“BA and AA are trying to manufacture some consumer

benefits by distracting the Department of

Transportation with so-called letters of support.

Isn’t it strange how the letters are virtually

identical to the letter template on the airlines’

own website? Any purported theoretical consumer

benefits are unquestionably overwhelmed by the very

real threat to competition from these proposals.

Rivals would be squeezed and prices would rise.”

 

“The BA/AA chameleon is on full display to the

regulators. For years, American Airlines objected to

anti-trust immunity applications by competing

alliances but has developed amnesia now that it is a

proponent of its own deal.”

 

In its submission, Virgin Atlantic sets out why

Heathrow is such a critical factor in BA/AA’s

proposals: “We object to this particular alliance

application due to the overwhelming market power that

Oneworld would have on US-Heathrow routes. Even BA

recognises this and has expressed an interest in

stockpiling slots. Comparisons across alliance hubs

in Paris and Frankfurt are meaningless.”

 

BA already has the largest share of peak-hour slots

at Heathrow, which enables the airline to achieve the

optimal schedule for flights into and out of

Heathrow. The submission quotes comments from the

slot co-ordinator at Heathrow, ACL, who themselves

state: ” At Heathrow, pool slot allocations will not

achieve any significant new entry” and “new entrant

airlines still need to be flexible about the timing

of slots and accept commercially suboptimal timings.”

 

Virgin Atlantic is also highlighting to the DoT some

strange cases of BA/AA double-speak. While other

carriers which don’t have anti-trust immunity have

successfully added nine new EU-US routes since 2006,

BA and AA are claiming that approving anti-trust

immunity will enable them to bring consumer benefits

by starting a new route between Madrid and Dallas

Fort Worth - a route which has in fact already

started, without ATI approval in place, last month.

 

The European Commission has opened a wide-ranging

investigation into BA and AA’s proposals and the

Department of Transportation is expected to make a

decision by the end of this year.

 

BA and AA have tried twice before, and failed, to get

anti-trust immunity.
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