SOUTH NORWALK, Conn., Jan. 11 /PRNewswire/ -- Virgin Atlantic Airways has submitted its written response to the U.S. Department of Transportation in relation to the Department of Justice's comments in December on the proposed British Airways/ American Airlines tie-up. The DOJ expressed a number of grave concerns over the competitive and consumer harms of the proposed BA/AA alliance. This is not the first time a competition authority has set out concerns regarding the proposals. In October of 2009, the European Commission issued its Statement of Objections and stated that the proposed alliance "may be in breach of European rules on restrictive business practices."
The Department of Justice said in its submission that the "Applicants' proposed alliance would significantly harm competition on the most significant transatlantic routes" and that "the likely magnitude and value of any of these alleged benefits is overstated."
Virgin Atlantic's response to the DOT states "Virgin Atlantic agrees with the concerns the DOJ has raised about the competitive and consumer harms the proposed link up would cause if the Department was to grant ATI ... Virgin Atlantic urges the Department to deny the application outright."
Sir Richard Branson, President of Virgin Atlantic, said;
"Now two competition authorities have voiced their concerns over the proposed BA/AA alliance, we renew our call on the regulators to reject these anti-competitive proposals.
"The competition authorities have thoroughly scrutinized the proposals in an effort to safeguard competition in the interests of consumers. Having done so, both the authorities on opposite sides of the Atlantic have cited concerns. These concerns are absolutely justified and the alliance should not be given the go-ahead."
The U.S. Department of Justice concerns included that the proposed alliance would result in competitive harm on certain transatlantic routes serving 2.5m passengers every year and that competitive entry at Heathrow is unlikely to prevent adverse competitive effects. The DOJ recommends that, "given the risk of significant harm, any grant of immunity should be limited to protect competition."
For further information please contact the Virgin Atlantic U.S. Press Office at 203-750-2570 or log onto www.VirginAtlantic.com.
Notes to Editors
The key points of Virgin Atlantic's opposition to the proposed merger 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-LAX 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 47% of slots at Heathrow.
SOURCE Virgin Atlantic Airways