Virgin will battle BA-AA merger

Launching a campaign against the deal, Branson said a tie-up between BA and AA would lead to price-fixing and force travel agents to put business their way.

Virgin planes will be emblazoned with the slogan "No Way BA/AA" as part of the protest campaign against the deal which would involve a combined route network serving 443 destinations in 106 countries with 6 200 daily departures.

Branson said he expected regulators to reject the merger.

"The competition authorities listened to us twice before and rejected the idea of BA and AA working effectively as one airline because they believed it to be anti-competitive," he told BBC radio.

"We believe nothing has changed, and we are going to wage a major battle to try to stop the two biggest carriers in the world from effectively working as one carrier, being able to sit down behind closed doors and fix prices and, we believe, damage the smaller competitors on the routes."

He added: "The market competitor, massively, is BA. If you then put American Airlines on top you are talking about 65% of the market.

"You then are left with really two competitors to compete with them: Virgin and United."

Similar merger proposals failed in 1997 and 2001.

BA chief executive Willie Walsh said the new deal, which also involves Spanish carrier Iberia, would be beneficial for passengers and the aviation industry.

In a spirited debate with Branson on the radio programme, Walsh argued that the aviation industry had moved on since the introduction of the "open skies" agreement which frees up transatlantic routes.

Walsh said: "These arguments are old, they are out of date, it's time to move on.

"We have got a new operating regulatory environment, a new competitive environment - move with the times. This is an issue that will be assessed by the competition regulators, the experts in this field. And it's only if they believe that this is more convenient for the consumer, that this is pro-consumer, will it be approved."

- AFP