Branson slams Brussells over BA's transatlantic plans

Airline tycoon Richard Branson accused Europe’s competition authorities of being “lazy” and “misguided” as he stepped up opposition to a planned alliance between British Airways and American Airlines.

Airline tycoon Richard Branson accused Europe’s competition authorities of being “lazy” and “misguided” as he stepped up opposition to a planned alliance between British Airways and American Airlines.

The Virgin Atlantic boss said the proposed venture – which would be in association with Iberia as part of merger plans – should be blocked by Brussels.

Mr Branson told the Financial Times that he would consider some form of “legal process” if the European Commission rules against him.

“We actually believe the Commission should just say ’No way BA-AA’,” he said.

“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 added that the transatlantic joint venture should be treated as a merger like the tie-up between BA and Iberia, which was formally agreed last week.

The deal between the UK and Spanish carriers will create one of the world’s largest airline groups with 408 aircraft carrying more than 58 million passengers a year.

BA believes the three-way agreement will benefit consumers by improving connections and flight schedules, although Mr Branson has criticised the link-up as “bad for passengers, bad for competition and bad for the UK and US aviation industry”.

The FT report said legal restrictions such as the 25% foreign ownership limits on US carriers would probably rule out a formal tie-up between BA and AA.

It said the transatlantic deal between the three carriers would avoid such restrictions by sharing revenues on routes and jointly managing schedules, capacity and pricing, but no stakes in the businesses would be exchanged.

The fact that there is no change to the ownership structure means the three-way deal is also not subject to the same European Commission regulatory approval as the BA-Iberia merger.

BA’s tie-up with Iberia has also garnered its share of hostility from rivals.

Virgin Atlantic said the deal would increase BA’s dominance at Heathrow Airport, while low-fare carrier Ryanair has likened the merger to “two drunks trying to prop each other up”.

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