Page last updated at 23:28 GMT, Saturday, 13 February 2010

Sir Richard Branson slams US airline competition move

British Airways planes
British Airways would operate a joint venture across the Atlantic

A US government decision to support American Airlines and British Airways working together is a "kick in the teeth", Sir Richard Branson has said.

Under the plan the airlines would share costs but give up four transatlantic take-off and landing slots.

Virgin Atlantic boss Sir Richard said the agreement would "blatantly harm competition and the consumer".

BA said closer co-operation between the airlines would benefit passengers with more choice and lower fares.

The US Department of Transportation said on Saturday it proposed granting immunity from antitrust competition laws to American Airlines and its "oneworld" alliance partners, including British Airways.

The Department said the proposed alliance would enhance competition in the airline industry "by creating competition with the existing Star Alliance and the SkyTeam alliance, which already have been granted immunity."

If approval is granted, the alliance partners - American, BA, Iberia, Finnair and Royal Jordanian Airlines - "would be able to more closely coordinate international operations in transatlantic markets," the DOT said.

As a condition of approval, it proposed that the applicants make four pairs of slots available to competitors on the US-Heathrow route.

'Two fingers'

In the US, antitrust laws prevent businesses from co-ordinating prices and schedules.

Immunity from those laws can be granted in certain cases, if it is decided that consumers would benefit more from businesses working together.

Sir Richard said: "The US Department of Justice, who are the experts in competition issues, called for strict remedies to protect the public interest, because the alliance will blatantly harm competition and the consumer.

"The Department of Transportation has chosen to stick two fingers up at them.

"Millions of transatlantic travellers will be adversely affected if the alliance receives final approval.

"In my personal opinion, this draft decision is a real kick in the teeth for consumers and they will be paying the price for it for years to come."

BA said it would operate a joint business with American Airlines and Iberia between Europe and North America.

A spokesman said: "As verified by the DOT [Department of Transportation], their closer cooperation, made possible by antitrust immunity, will benefit customers with more travel choices and convenient schedules, expanded opportunities to earn and redeem frequent flyer miles, and greater availability of lower fares."

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