Virgin strikes back against BAAA deal
26 / 11 / 2008
VIRGIN Atlantic has urged the European Commission to reject the planned virtual merger between British Airways and American Airlines.
In an document submitted to the European Commission competition authorities Virgin states that that BA and American Airlines, if allowed to combine, would use their market power to raise fares, adjust schedules to keep out competitors and cut off connecting feeder traffic to other carriers at Heathrow. In addition, they would reinforce their market power through a combined Frequent Flyer programme, which no competitor at Heathrow could replicate.
Steve Ridgway, chief executive of Virgin Atlantic, said: “We urge the European Commission to reject outright this third attempt by BA and AA to stifle competition between Heathrow and the US. Their virtual merger would lock-up one of the world’s busiest air corridors against new and existing competition, increase BA’s grip on the most constrained international airport in the world and cause grave harm to consumers with higher prices.”
Ridgway added: “Even if BA and AA were forced to give up slots at Heathrow, these so-called slot remedies on their own would not be suitable as they would be insufficient to reinstate any effective level of competition. They would not cancel out anticompetitive effects arising out of the increased network reach planned by BA and AA.”