Virgin aims to block BA-AA tie-up

BA is continuing talks with AA

Sir Richard Branson is launching a campaign to try to block the proposed tie-up between British Airways (BA) and American Airlines (AA).

The Virgin Atlantic boss has already attacked the plans, claiming it would create a "monster monopoly".

British Airways counters that the proposed tie-up would be good news for both passengers and the wider industry.

A growing number of global airlines are seeking mergers or other forms of tie-ups as they battle high fuel

prices.

'Major battle'

"We are going to wage a major battle to stop the two largest airlines in the world effectively working as one carrier," Sir Richard told the BBC's Today programme.

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"Allowing the two biggest carriers in the world to effectively act as one…will be anti-competitive."

British Airways and its US rival are not aiming for a full merger.

Rather, they aim to be able to agree fares, routes and schedules.

Also speaking to the Today programme, BA chief executive Willie Walsh countered that a tie-up with AA would be "great news for the consumer".

"This is an issue that will be accessed by the competition regulators, the experts in this field," he said.

BA has tried and failed to form a tie-up with AA twice before, in 1997 and 2001.

Mr Walsh said this time around he was confident the deal would gain regulatory approval due to the increased competition in the airline industry following the Open Skies deal between the US and European Union.

Open Skies - which came into force in March this year - has ended limits on which airlines can fly between the US and Europe.