British Airways Under Serious Pressure as Richard Branson campaigns against merger

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Branson campaigns against BA merger

Virgin boss Sir Richard Branson pledged he would "wage a major battle" to block a proposed merger between British Airways and American Airlines.

Sir Richard said the union between BA and AA would lead to price-fixing and force travel agents to put business their way.

He is launching a campaign against the deal, which would involve a combined route network serving 443 destinations in 106 countries with 6,200 daily departures. The slogan 'No Way BA/AA' will be painted on the side of his company's planes.

Speaking on BBC Radio 4's Today programme ahead of the campaign launch on the outskirts of Heathrow Airport, Sir Richard said he expected regulators to reject the merger.

"The competition authorities listened to us twice before and rejected the idea of BA and AA working effectively as one airline because they believed it to be anti-competitive," Sir Richard said.

"We believe nothing has changed, and we are going to wage a major battle to try to stop the two biggest carriers in the world from effectively working as one carrier, being able to sit down behind closed doors and fix prices and, we believe, damage the smaller competitors on the routes."

He added: "The market competitor, massively, is BA. If you then put American Airlines on top you are talking about 65% of the market. You then are left with really two competitors to compete with them: Virgin and United.

"And the danger is that BA and American together will be able to go into travel agents and say, 'Look, we have 65% of the market, and 65% of your business is coming our way. Next year we want you to make it 68%, the year after that we want you to make it 71%."

Similar merger proposals failed in 1997 and 2001.

But BA chief executive Willie Walsh said the new deal, which also involves Spanish carrier Iberia, would be good for passengers and good for the aviation industry. And he told the programme the industry had moved on since the introduction of the 'open skies' agreement, freeing up transatlantic routes.
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British Airways is to offer redundancy packages to managers as part of the airline's battle to cut costs, it emerged.

It is thought the offer of voluntary redundancy will be made to around 1,400 staff, but with no plans for compulsory redundancies.

A BA spokesman said: "We are in the worst trading environment the industry has ever seen. Like all airlines we are having to identify areas where we can reduce costs. It has been decided to give managers and senior managers the opportunity to apply for voluntary redundancy."

There was no target for the number of redundancies, he added.

The Daily Mirror said letters offering severance packages to managers on salaries from £40,000 to £250,000 will be sent out on September 25. It is part of attempts to cut its wage bill by £170 million, the newspaper added.

The company's fuel bill is expected to top £3 billion this year, the equivalent of more than £8 million a day.

While oil prices have fallen back in recent weeks, BA has struggled to benefit because of a fall in the pound against the dollar, the currency used for oil trading. Employee costs are second only to fuel at the airline.

BA is also battling a general weakening in demand, with August traffic figures released by the airline showing a 2.7% fall in its load factor - a key measure of how full its planes are - compared to 12 months earlier.

Premium traffic rose 2.2% - compared with a 2.1% fall in non-premium travel - but BA also warned that the outlook for premium travel remained "uncertain" until after the summer break.

The total number of passengers carried by the airline fell 3.2% to 2,988,000 compared to August last year

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Oh dear....................

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