(Corrects company name to Virgin Atlantic from Virgin America
in paragraphs 2 and 4)
* Richard Branson says BA/AMR tie would create monopoly
* Branson calls on government to reject application
CHICAGO, May 14 A proposed alliance between AMR
Corp's AMR.N American Airlines and British Airways BAY.L
would create a "monster monopoly," British entrepreneur Richard
Branson said on Thursday.
Branson, whose Virgin Group [VA.UL] controls BA rival
Virgin Atlantic, said in a statement that an alliance between
BA and American would strangle airline competition on routes
between London's Heathrow Airport and the United States.
"If the proposed merger between BA and American Airlines is
allowed to go ahead, then the result for passengers, employees,
communities and for fair and healthy competition, would be
disastrous," Branson said.
Virgin Atlantic has asked the U.S. Department of
Transportation to reject the proposed alliance, which would
allow BA and American Airlines to cooperate on schedules, fares
Before it can approve the alliance, which includes other
airlines in the oneworld alliance, the Obama administration
will accept public comment on the joint business arrangement.
The application seeks an exemption from certain antitrust
provisions. A final decision is expected within six months.
"As usual, Virgin seems to be trotting out old, outdated
arguments that do not reflect the current environment and
trying to sensationalize the matter," an AMR spokesman said.
AMR argues that there is no risk of a monopoly because more
than 40 airlines fly between Europe and the United States. The
company also said travelers will have greater access to cheap
fares and smoother connections.
The application, the second attempt by American and British
Airways to expand their long-standing marketing ties, was
submitted last August.
The previous attempt failed in 2002 on questions over
access to Heathrow. BA is the dominant carrier at Heathrow,
where American also has a key presence.
(Reporting by Kyle Peterson; Editing by Maureen Bavdek)