News Release
Continental Airlines Attacks AA-BA Alliance
LONDON, September 3, 1998 -- Continental Airlines (NYSE: CAI.A and CAI.B) today heavily criticized the anti-competitive aspects of the proposed British Airways-American Airlines combination. In a filing with the British Office of Fair Trading and in a speech given by Continental Chairman and CEO Gordon Bethune, the airline insisted that a proposed alliance between two of the world's largest carriers should not proceed due to its negative impact on competition and consumers. The carrier has filed similar comments and testimony with the European Commission and the Department of Transportation, and Bethune today referred to the proposed alliance as a "de facto merger."
"Most alliances are pro-consumer, and they are the future of our industry," Bethune said at the World Aerospace and Air Transport Conference sponsored by The Financial Times. "As long as they are competitive, they should be welcomed by travelers. But a marriage between BA and AA is a de facto merger, and it would negatively affect competition between the United States and the United Kingdom."
Bethune's speech and Continental's filing condemned the market dominance between the U.S. and U.K. that a BA-AA combination would create.
"This merger would punish the consumer by reducing competition and increasing fares," Bethune said. "In the New York-London market alone the two mega carriers would control 57 percent of the seats."
Additionally, Bethune told conference participants, including British Airways Chairman Bob Ayling, that an Open Skies agreement between the U.S. and U.K. does not adequately address BA-AA anti-competitive alliance issues because severe slot and facility constraints at London's Heathrow and Gatwick airports prohibit truly Open Skies.