Branson bashes back

06 0CT 2008:  Things are heating up in the playground. BA boss Willie Walsh says: "Richard Branson sounds like a broken record. He is stuck in the groove of 1996”.  Walsh urged the founder of Virgin Atlantic to “wake up” to new economic landscape and stop relying on numbers that “don't add up”.

Walsh’s attack was in response to Branson’s "No Way BA/AA" – a £3 ($5.7) million lobby campaign to prevent BA’s proposed joint-venture with American Airlines.  Branson claims any such deal would severely damage competition on major transatlantic routes and be detrimental for consumers by reducing competition and hiking prices on the busiest air corridor in the world.

"Almost all the arguments Virgin puts forward in relation to our application for a transatlantic tie-up with American Airlines rely on figures that are irrelevant or mistaken.

"Virgin even tries to deny that it has a monopoly on fast trains between London and Manchester, yet any railway timetable shows that it does. Why should we trust any of Virgin's numbers if it has a problem counting to one?"

Branson responded, “Make no mistake – if this monster monopoly is approved it will be third time unlucky for consumers. It will still be bad for passengers, bad for competition, and bad for the UK and US aviation industry”.

Bad blood has existed between the two carriers since Virgin shopped BA to the competition authorities in 2006 over fuel surcharge price-fixing costing the airline £350 ($668) million.

"Virgin's business model is its own affair, but it seems to believe that the purpose of aviation regulation between the entire EU and the US is to give Virgin a cushy life," Walsh said.

"Wake up, Branson! The first stage 'Open Skies' agreement between the EU and US has changed everything."

Walsh said the Star alliance between Lufthansa, United and Skyteam, (including Air France/KLM and Delta) already has the anti-trust immunity that BA and American are also seeking.

"For all Virgin's exaggerated talk of our venture with American creating a 'stranglehold' at Heathrow,” he said, “the fact is that a deal would increase our existing slot-holding by just three percentage points."