Branson to challenge airline tie up

Sir Richard Branson’s Virgin Atlantic is set to launch a major advertising campaign to challenge British Airways’ (BA) plans for a tie-up with American Airlines (AA). Branson claims that the proposed deal would damage transatlantic competition.

BA is expected to make an application in the US this week to enact the joint venture with AA. The pact between the two airlines would mean they would have dominant shares of transatlantic flights from Heathrow on six routes including New York JFK, Chicago and Los Angeles.

On Sunday (August 3) Branson wrote to US presidential candidates Barack Obama and John McCain, urging them to oppose the deal. In his letter Branson said the solution to the problems the airline industry faces should not be solved by “an anti-competitive agreement which will inevitably lead to higher fares”.

Virgin Atlantic says the tie-up would result in BA and AA having such a stranglehold on flights from Heathrow to the US that it would be “dangerous to consumers”. The company says it will launch a major advertising and lobbying campaign to ensure regulators and consumers are fully aware of the “dangerous nature” of the alliance.

Last week, one present and three past BA executives, including former marketing director Martin George, were charged with price-fixing charges. The charges relate to the alleged fixing of passenger fuel surcharges in collusion with Virgin Atlantic. The four are due to appear in court next month and face up to five years in jail.

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