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Issue #583 | Forest Products

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2014 Media Kit
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Branson slams EU Commission over tie-up

By: | at 08:00 PM | Channel(s): Air Cargo  

The founder of Virgin Group , Richard Branson, has slammed the European Commission’s handling of a proposed tie-up between British Airways and American Airlines in an interview.

British Airways, American Airlines and Spain’s Iberia , members of the Oneworld alliance, want to deepen the pact to take advantage of the U.S./EU “Open Skies” agreement, which liberalises trans-Atlantic aviation.

But Branson, who last month called proposals by Oneworld members to cede a number of lucrative trans-Atlantic slots in an in effort to seal approval for the alliance “woefully inadequate”, said he strongly opposed such an alliance.

“We actually believe the Commission should just say: No way BA-AA’” Branson told the Financial Times.

“The way the Commission is currently going about it is fundamentally flawed and misguided, and to be honest it’s rather a lazy approach,” he said.

Alliances are seen as a lucrative alternative to mergers and large-scale investments. The airlines want to jointly manage schedules, capacity and pricing as well as share revenues on routes between North America and Europe.

The commission opened an investigation into a planned alliance last April. But Branson said the commission should treat the proposed tie-up as a merger.

“In every other way they’ll be behaving as a single entity,” Branson said.

“So we believe that the Commission should be treating it as they would treat any merger situation.”

Last week British Airways and Spain’s Iberia signed an $8 billion merger to create the world’s third-largest airline, bringing a three-way tie-up with American Airlines a step closer. (Reuters)