Virgin says BA and AA would dominate Heathrow

[September 26th 2008]

The war of words between airlines Virgin Atlantic and British Airways/American Airlines over the proposed alliance between BA and AA is intensifying as Sir Richard Branson responds to questions from BA.

Virgin Atlantic has sent a letter for publication in BA’s in-house newsletter after BA posed six questions to Branson about the planned alliance.

In one of the key questions BA asks why the alliance would be uncompetitive as Heathrow would still have seven EU or US airlines flying to the USA and other airlines could also introduce new flights.

Branson responds: “The seven EU and US airlines flying to the US from Heathrow offer limited services to only a few destinations. A price tag of £30 million for decent slot pairs is a huge barrier to any airline looking to start a profitable service at the airport”.

In another question, BA points out that its combined market share on transatlantic routes from Heathrow (51%) is far smaller than Lufthansa/Star Alliance’s from Frankfurt (80%) or Air France/SkyTeam’s from Paris (73%) so why should it be regarded as unfair?

In response Branson says: “Heathrow is absolutely at the heart of this debate as nearly a quarter of all passengers between the EU and US go through Heathrow, more than travel from Frankfurt or Charles de Gaulle”.

“Misleadingly, BA has been using date which hides the 6 million passengers who book direct or transfer onto transatlantic flights. This allows BA to claim a smaller share of passengers than the more accurate onboard picture shows,” Branson continues.

Branson also gives short shrift to BA’s suggestion that if BA and AA used their alliance to put up fares and reduce service levels it would give Virgin a huge competitive opportunity.

“The stranglehold that BA/AA would have over travel agents and corporate customers, let alone half of all slots at Heathrow, would be used in an attempt to destroy its competitors. Any ability to respond would also be restricted due to the power of BA/AA’s dominant short haul network which can channel passengers onto its own transatlantic flights, therefore diverting passengers away from other carriers,” claims Branson.

Written by: Nick Purdom

Save up to 60% and book your Heathrow Airport parking at an unbeatable price with Holiday Extras