The New Transatlantic Alliance Could Affect Competition
by Abbey on 08/10/09 at 7:50 pm
The European Commission has sent an official statement of objections against anti-competitive alliance of British Airways and American Airlines. Virgin Atlantic completely supported the European Commission as it realizes that the alliance creation will negatively influence on time-sensitive passengers on many transatlantic routes.
There is no access to the Statement of Objections that is why Virgin Atlantic can not comment in detail on this very issue. But it hopes that the Commission will understand that actions of the alliance will have a devastating effect. The alliance will influence greatly on the competition and consumer interests of six routes from Heathrow to the U.S. It means that it will receive doubtless control on time-sensitive premium passengers.
Steve Ridgway, Chief Executive of Virgin Atlantic, said that they agreed with the European Commission concerning anti-competitive issues with British Airways and American Airlines’ offers. He also added the alliance is considered to be the option for two carriers that will help them to increase their power by setting prices and agreeing schedules at Heathrow.
Virgin Atlantic believes that if the alliance exists, it will use its position to destroy competitive tendencies and increase prices. It is also considered that British Airways and American Airlines a will become the only company that take the most profitable routes between Heathrow and the U.S.
According to Steve Ridgway, Virgin Atlantic will continue to expound the essence of their claims to the European Commission and prove that the alliance will cause an irreparable harm to healthy competition in the aviation market. He added that the alliance of British Airways and American Airlines is like “bad news for completion and for consumers”. That is why Virgin Atlantic appealed to the US Department of Transportation’s to consider the issue carefully, because it is necessary to protect the competition and interests of consumers.
Source: BBC
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