BA deal will cause irreversible damage to UK aviation
- By Richard Branson -
- Mar 29, 2012
With the competition authority due to announce its decision on British Airways owner IAG’s proposed purchase of bmi deal tomorrow (Friday 30 March 2012), I have written a personal letter to the Commissioner of Competition, Joaquin Almunia, stating that BA’s proposed competition remedies are completely inadequate and would leave competition in UK aviation seriously distorted.
The Commission is here to protect the competitiveness of industry and ultimately the consumer’s right to good value products and services. It cannot sit back and allow big businesses to get bigger at the expense of smaller businesses that are trying to offer competition and choice. The remedies provided by BA in its alliance with American Airlines proved completely ineffective. The same mistakes cannot be allowed to happen again.
This deal represents the last major change in ownership of landing and take-off slots in the UK, influencing aviation in this country for decades to come. BA already has a dominant position on flying in this country and any further increase in this dominance will further seriously damage consumer choice.
BA’s proposed competition remedies to get this purchase cleared are woefully inadequate and will ensure that BA continues to control all of the key domestic and some international routes. I am really battling to understand why the commission seems to be bending over backwards to clear this deal at phase one rather than submitting it to the proper scrutiny intended in phase two of the clearance process.
We offer a compelling alternative to an IAG deal and are prepared to move quickly to re-open discussions with Lufthansa if the deal is not cleared in phase one. As far as I can see, the Commission has two options: to refer this deal to a phase two assessment to obtain a strong set of remedies or block the transaction completely.
The remedies are in no way adequate enough to replicate the competition that bmi currently offers British Airways and a number of routes including the crucial connecting route from Manchester to Heathrow are not being offered any protection at all.
BA’s claims that their deal would be the best way to save jobs is disingenuous. I pledge that our own airline would operate almost all of bmi’s key markets in competition with BA, preserving thousands of jobs.
By Richard Branson. Founder of Virgin Group