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Virgin Atlantic puts more pressure to reject BA/AA deal

12-Jan-2010

Submitting new comments relating to the Department of Justice’s (DoJ) rejection of the BA/AA oneworld anti trust immunity (ATI) petition, Virgin Atlantic echoed the DoJ in its submission to the Department of Transportation (DoT), saying it, too, has “grave concerns” over the ATI. Virgin Atlantic Airways noting DOJ’s objections were not the first time a competition authority has set out concerns regarding the proposals and cited similar concern from the European Commission that ATI "may be in breach of European rules on restrictive business practices."

Virgin Atlantic's response to the DoT states, "Virgin Atlantic agrees with the concerns the DoJ has raised about the competitive and consumer harms the proposed link up would cause if the Department was to grant ATI...Virgin Atlantic urges the Department to deny the application outright."

"Now two competition authorities have voiced their concerns over the proposed BA/AA alliance, we renew our call on the regulators to reject these anti-competitive proposals,” said Sir Richard Branson, president of Virgin Atlantic. "The competition authorities have thoroughly scrutinised the proposals in an effort to safeguard competition in the interests of consumers. Having done so, both the authorities on opposite sides of the Atlantic have cited concerns. These concerns are absolutely justified and the alliance should not be given the go-ahead."

Once again it pointed out several reasons why ATI should not be granted including using their “exemption from competition laws and their overwhelming dominance to destroy competition, raise prices and reduce choice.” VA also said the two carriers will have a monopoly or be dominant on some of the “busiest and most profitable routes between the US and Heathrow.”

“In terms of capacity BA and AA would control 80% of the Heathrow-Boston markets, 100% of LHR-Dallas, 62% of LHR-JFK, and 70% of the LHR-MIA markets,” it said. They would also hold large market share at LAX and Chicago.

The airline also said cited Heathrow’s unique position as a hub in Europe since it is “virtually full” and would thus need to give up slots since the two airlines "would dominate 47% of slots at Heathrow Airport".

According to Airport Coordination Ltd (the Heathrow slot controller), BA and American controlled 44.4% of slots during the last Northern Summer schedule. Virgin Atlantic controlled 3.4%.

London Heathrow Airport allocation of air transport movements (per week): Summer 2009


Airline

Summer 2009

Allocation

% of total

1

British Airways

3,976

41.8%

2

bmi

1,091

11.5%

3

Lufthansa

406

4.3%

4

Virgin Atlantic

325

3.4%

5

Aer Lingus

290

3.0%

6

SAS

272

2.9%

7

American Airlines

250

2.6%

8

KLM

196

2.1%

9

Iberia

196

2.1%

10

Air Canada

168

1.8%

11

Air France

154

1.6%

12

United Airlines

154

1.6%


Total

9,515

100%

 

Contingency (spare slots)

9

 
 

ATM limit

9,524

 

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