Manufacturing Industry

Virgin Atlantic and easyJet critical of British Airways/KLM merger - Brief Article

Airline Industry Information, June 8, 2000

Confirmation that British Airways and KLM are in merger talks has caused controversy amongst rival airlines in Europe.

Virgin Atlantic Airways' chairman Sir Richard Branson has said that the deal would create 'huge competition issues' because the merger would see the new company dominating UK regional routes and UK routes to The Netherlands.

Looking at the broader implications of BA teaming up with KLM and American Airlines (AA) merging with Northwest Airlines Branson also said 'Combined together, BA, AA, North West and KLM would destroy competition on the North Atlantic and at Heathrow and in the UK regions. This is surely, by anyone's standards, a merger too far.'

Criticism of the proposed deal has also been levied by low-cost carrier easyJet, whose chairman Stelio Haji-Ioannou has already written to the president of the European Commission to request an investigation into the proposal. Haji-Ioannou claims that the merger could force up air fares by reducing competition and told PA News that the merger was a case of 'two habitual offenders in unfair competition are ganging up on us.'

The easyJet chairman also said that the merger should not be allowed to go ahead unless both BA and KLM were forced to cede a substantial number of slots at London-Heathrow and Schiphol airports to rivals according to Reuters.

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