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Virgin Atlantic's Branson Says No to British Airways/American Airlines Merger [National Press Club]

Article by Hope Katz Gibbs
National Press Club, The Wire
May 14, 2009
Photo of Sir Richard Branson by Noel St. John

“Please join me in saying ‘No Way BA / AA,’ ” said Sir Richard Branson during his breakfast speech on May 14. The English industrialist was in Washington to make his case about why the proposed merger between British Airways and American Airlines would damage competition on transatlantic routes.

“If the proposed merger between BA and AA is allowed to go ahead then the result for passengers, employees, communities and for fair and healthy competition, would be disastrous,” said the chairman of the Virgin Group and ounder of the airline Virgin Atlantic 25 years ago. “It doesn’t make sense to encourage even less competition by allowing dominant carriers to increase their stranglehold by setting prices together and agreeing schedules.”

Branson said if the merger were allowed to go through, he couldn’t guarantee VA’s survival.

“We have survived the recessions in 1991, 2001, and 9/11, but if this alliance is permitted to occur, it will be like competing with our hands tied behind our back,” he said.

British Airways has tried to secure a pact with its U.S. rival twice before but has previously refused to meet U.S. regulators’ demands that it give up a large number of flight slots. However, the airline suffered an 88% drop in profits between April and June last year and said the industry faced its worst-ever period. Reports say it would be prepared to sacrifice hundreds of transatlantic flights to allow the deal to go ahead.

The environmental philanthropist, knighted in 1999 by the Queen of England for his services to entrepreneurship, answered questions at the May 14 event about his current bid to bring the new fuel Isobutanol to bring to market. Branson’s Virgin Fuels group has invested $10 million in the Pasadena, Calif.-based start-up Gevo Inc., which is working to commercialize second-generation biofuels. “Isobutanol doesn’t freeze at 15,000 feet like ethanol does, and when you are flying jet planes that is important,” he said.

Branson also said another one of his companies, Virgin Trains, which operates the West Coast Main Line in Britain, is bidding for a slice of President Obama’s multibillion-dollar upgrade of the American rail network. “We’d be happy to help the president realize his goal of brining high-speed passenger trains to the U.S.,” he said.

Branson also talked about his bid to take his spacecraft Eve (named for his mother) into orbit later this year. “These are exciting days. Once we perfect our approach, I think we might give the moon a miss and go straight to Mars.”


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