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Virgin Atlantic’s President, Sir Richard Branson, has highlighted the hypocritical approach Oneworld is taking over the possible Japan Airlines and Delta alliance compared to the proposed BA/AA tie-up. Oneworld has said a JAL/Delta alliance would “would raise intractable competition issues and face severe regulatory opposition in the US because of the stranglehold this combination would hold on Japan-USA travel.” American Airline’s CEO Gerard Arpey has also said “there would be ‘zero possibility’ of DL/JAL receiving ATI” and that they “will object, and object stridently” because “the whole design of open skies and immunity is not to allow the dominant carriers to partner and drive the less dominant carriers out of the market.”
Sir Richard Branson, President of Virgin Atlantic, commented; “Oneworld’s approach to the potential JAL/Delta transpacific alliance is hypocritical in the extreme. BA and AA’s arguments against the JAL/Delta transpacific alliance read like a carbon copy of our longstanding objections to a BA/AA transatlantic alliance. The only difference is that BA/AA poses a far greater competition issues and risk to consumers than JAL/Delta.”
BA and AA, along with its alliance partners, would hold 47 percent of Heathrow slots and overlap in six Heathrow-US markets with sky-high market shares: Dallas Fort-Worth (100%); Boston (80%); Miami (70%); Chicago (67%); New York JFK (64%) and Los Angeles (48%).
Comparatively JAL/Delta would hold 40% of Narita slots and overlap in three Narita-mainland US markets: New York JFK (60%); San Francisco (44%) and Los Angeles (36%).
This week more Oneworld double standards have been exposed in relation to the role of Department of Justice in anti-trust immunity cases. In the submissions to the DOT earlier this week BA and AA discounted the DOJ’s concerns about the Oneworld deal at Heathrow, and urged DOT to reject DOJ’s recommended remedies out of hand. Yet, in a Japan briefing paper, American Airlines said “the US Department of Justice occupies a very influential role in the process,” and would presumably urge the DOT to give great weight to potential DOJ concerns in a possible JAL/Delta case. Oneworld simply cannot have it both ways.
Furthermore BA’s offer to transfer slots at Heathrow to Japan Airlines, in an effort to keep it in the alliance, puts forward more evidence that Heathrow Airport is effectively closed. Earlier this week, in an effort to keep Japan Airlines with the alliance, a deal was offered to JAL which apparently included slots at the airport. The total value ascribed to the deal was $200m. This figure speaks volumes about how difficult it is to gain access to well-timed Heathrow slots. BA’s CEO Willie Walsh himself told financial analysts last year that Heathrow is “full” yet in their submission to the US regulators in relation to BA and AA they continue to claim it is an open airport and slots access poses no barrier to competitive entry.
Air Richard Branson concluded: “It is not often we can say that we wholeheartedly agree with BA and AA on anti-trust issues but we agreed with BA’s CEO Willie Walsh last year that Heathrow is full, we agreed with American Airlines’ CFO Tom Horton last month that slot give ups and route carve-out are insufficient remedies for an anticompetitive alliance and we continue to agree with American Airlines’ CEO Gerard Arpey that the DOT should not grant anti-trust immunity where there are numerous overlap markets with high market shares.
“If we apply Oneworld’s own JAL/Delta antitrust immunity test to BA/AA it is irrefutably clear BA/AA should be rejected, and rejected outright. Oneworld’s double standards in its fight for Japan Airlines is breathtaking.”
TravelDailyNews Asia-Pacific editorial team has an experience of over 35 years in B2B travel journalism as well as in tourism & hospitality marketing and communications.
