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Virgin Atlantic welcomes EC’s concerns about proposed BA/AA alliance

Virgin Atlantic, one of the world"s leading long-haul airlines, welcomed the news that theEuropean Commission has sent a Statement of Objections toBritish Airways andAmerican Airlines which details its concerns over their proposed anti-competitive alliance. Virgin Atlantic understands from press reports that the European Commission has identified that the proposed alliance would have negative impacts on time-sensitive passengers on a number of transatlantic routes. As Virgin Atlantic does not have access to the Statement of Objections at this point in time, it cannot currently offer detailed comments. However, Virgin Atlantic would expect the Commission to find that the proposed alliance would damage competition and consumer interests on all six of the routes from Heathrow to the US on which BA and AA both operate currently.  These include Heathrow to New York JFK on which BA and AA together would control 62% of all capacity and would have an unassailable grip on time-sensitive premium passengers.Steve Ridgway, Chief Executive of Virgin Atlantic, said;“Virgin Atlantic agrees with the European Commission that there are anti-competitive issues with BA and AA’s proposals. The European Commission’s concerns are absolutely justified. This alliance between BA and AA is a monster monopoly which, if given the go-ahead, will allow these dominant carriers to increase their stranglehold at Heathrow by setting prices and agreeing schedules. We will continue to set out our concerns in order to demonstrate clearly to the European Commission the irreversible damage to competition this alliance would have on arguably the most important aviation markets in the world. A tie-up between BA and AA is bad news for competition and bad news for the consumer.” Steve Ridgway added;“We await the US Department of Transportation’s decision in due course and urge them to scrutinise thoroughly the proposals in order to safeguard competition and look after the interests of consumers. “In particular, we urge the DoT to examine critically BA's claims that through the alliance with AA it will increase competition for travel between the US and points on its short-haul network. Yet its Chief Executive, Willie Walsh, has this week admitted that BA's true plan is to reduce its short-haul operations from Heathrow, wiping out any supposed benefits in these markets”.Virgin Atlantic's key points to the European Commission include:- BA/AA will use their exemption from competition laws and their overwhelming dominance to destroy competition, raise prices and reduce choice- BA/AA 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:-LHR- BOS 80%-LHR-DFW 100%-LHR-JFK 62%-LHR – LA 48%-LHR-MIA 70%-LHR-ORD 68%- Heathrow Airport is unique in Europe. Unlike other European hubs Heathrow is virtually full preventing competitors from challenging the dominance of BA and AA. BA/AA would have 44% of slots at Heathrow.

First Content corp. (c) 2009