Transatlantic airline alliance counters Branson claims

American Airlines, British Airways and Iberia of Spain, jointly seeking approval from regulators to form a new trans-Atlantic alliance, are challenging the claims made by rivals that their alliance would reduce competition on the North Atlantic routes connecting London and the US.

The three carriers are attempting to persuade regulatory officials in the US to grant their joint venture immunity from anti-trust rules. Current regulations would limit the proposed alliance’s ability to coordinate fares and schedules and to share revenue. The joint venture has been particularly drawing fire from the head of Virgin, Sir Richard Branson.

The three airlines filed a response with US transportation officials late last week, saying that they “strongly object to Virgin Atlantic’s erroneous and unsupported allegations about the lack of competitiveness of overlap city pairs.”

In a 25 August motion Virgin maintained that BA and American currently carry two-thirds of all passengers on Heathrow-US flights, including nearly three-fourths of the traffic to and from New York’s JFK. American and BA rebutted that in fact they hold only a 44 per cent share of the bookings on the Heathrow-US route.

Officials from the European Union announced last week that they were investigating the proposed venture to determine if it would violate any of its anti-trust regulations.

American Airlines, British Airways and Iberia argue that the landscape has changed now that the Open Skies accord is in place, which has opened Heathrow Airport to additional carriers.

www.virgin-atlantic.com