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Washington - Billionaire Richard Branson said on Thursday a proposed tie-up of British Airways and American Airlines would threaten the survival of rivals, including his own carrier Virgin Atlantic.
The proposed tie-up of the North Atlantic operations, part of a five-airline plan awaiting approval from US authorities, "will be absolutely disastrous" for consumers, travel agents and the industry, he said.
"It will be the end of red-hot competition," the flamboyant British tycoon and head of the Virgin Group said at the National Press Club in Washington.
Branson said he was in Washington to put the finishing touches on Virgin Atlantic's "final submission" to the US Department of Transportation (DOT) to try to block the deal with BA and AMR Corporation's American Airlines.
He said the benefits touted for the deal "are illusory."
"It doesn't make sense to actually encourage even less competition by allowing the two largest dominant carriers to increase their stranglehold by setting price together and agreeing schedules."
Last year, American Airlines, British Airways and Iberia of Spain signed an agreement to cooperate over flights between North America and Europe to help them overcome soaring fuel costs, drawing fierce opposition from Branson's group.
BA, AA and Iberia are part of the 11-airline oneworld alliance, and are seeking, along with oneworld partners Finnair and Royal Jordanian, antitrust immunity from the US government on transatlantic flights.
'Their dominance has grown even further'
American Airlines spokesperson Ryan Mikolasik said Branson's speech and comments were "rife with over-generalisations, hyperbole and just plain old inaccuracies."
Mikolasik said that the five partners were "simply seeking to level the playing field" with some airlines in rival alliances Star and SkyTeam that already have US antitrust immunity.
"This permission or antitrust immunity has already been granted to 10 airlines in Star and six in SkyTeam - including the recently merged and now world's largest airline Delta," he said in an email.
He said that between them, the rivals hold more than 64% of the market share of European Union and US passengers.
The AA spokesperson noted that the US Department of Transportation is taking comments on their application for immunity through on Monday, and then will have six months to issue a ruling.
Asked about the impact of the deal on his own airline if it wins regulatory approval, Branson said: "I cannot guarantee Virgin Atlantic's survival if BA and AA are allowed to merge."
"It would be very, very difficult," he added.
Virgin Atlantic had argued against BA and AA tie-up proposals that ultimately failed in 1997 and 2001.
"Our arguments are as strong today as they were then. Their dominance has grown even further" in the key transatlantic route between the United States and London's Heathrow airport, he said.
"It's vital that regulators understand that this isn't just another alliance: it's an attempt to stitch-up the most important long-haul routes from Europe's most important airport," he said.
- AFP
