Sir Richard Branson: Why BA's monopoly game must be stopped?
Published: 08 Sep 2008
Sir Richard Branson has contributed an article in the British newspaper website, telegraph.co.uk. In his article, he has stated: "…don't be fooled into thinking British Airways is poor and needs propping up."
"I have a clear message for any competition regulators reading this column – don't be fooled into thinking British Airways is poor and needs propping up. In the last financial year, BA made £883m in pre-tax profits. The year before, it made £611m. It has huge cash reserves of £2bn," he wrote.
"Yet the very profitable BA is now asking regulators to help it survive. The airline that was gifted Concorde, tens of thousands of slots, Heathrow's Terminal 4, Gatwick North and more recently Terminal 5, is now begging regulators to allow it effectively to merge with American Airlines so it can thrive during a recession."
"It is an economic slowdown that every carrier has to grapple with, without the financial or regulatory support of governments and competition authorities. Zoom, Maxjet, Eos, Aloha and Silverjet have all disappeared in recent months without producing a begging bowl. BA, no longer a flag carrier, has to compete like the rest of us and doesn't deserve special treatment. The interests of consumers, not BA's sense of entitlement and its contrived financial crisis, should be the guiding light for competition regulators in Brussels and Washington."
"It is ironic that the UK's Competition Commission last month called for the break-up of one monopoly, in the form of airport owner BAA, yet British Airways is trying to create another one, with American. It wants to gain permission to collude with American, something that would normally be illegal, and fix ticket prices and schedules on US and European routes."
The full version can be read here: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/05/ccbran...
Comments
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Jim said on 9 Sep 08:
Branson's complaint has the ring of truth about it. Why does British Airways get such special treatment?
There are some aspects of Branson's public persona that I find annoying, but all indications are that he is a very good businessman. However, Branson does not appear to have the political connections equal to those of the executives at BA.