News Release
Continental Airlines, State Attorney General Warn Against American-British Airways Alliance
Attorney General of NY urges regulators to preserve competition
HOUSTON, December 21, 2001 -- Continental Airlines (NYSE: CAL) today will file comments with the U.S. Dept. of Transportation warning that the proposal by British Airways and American Airlines, the number one and two carriers between the U.S. and the U.K., to jointly set fares and schedules will suppress competition in transatlantic, intra-North American and intra-European markets.
Today’s filing echoes comments by the U.S. Dept. of Justice and five major U.S. and European airlines, who urge regulators on both sides of the Atlantic to reject the proposed alliance – tantamount to a merger of the transatlantic behemoths – outright.
Underscoring today’s filing is a letter from the attorney general of New York who urged U.S. Transportation Secretary Norman Mineta to ensure adequate competition between New York (NYC) and London Heathrow (LHR), one of the world’s busiest routes and the busiest intercontinental route from the U.S.
"AA and BA, the two biggest carriers on the NYC – LHR route, have the two greatest frequencies, with a combined share of 64 percent," wrote New York Attorney General Eliot Spitzer. "AA/BA’s weekly number of flights (approximately 105) would dwarf those of the two smaller players, United and Virgin Atlantic (approximately 28 each). This combined share is analogous to the combined share of AA and United, the number one and two domestic carriers, between New York and Los Angeles or New York and Chicago O’Hare, and would be at levels that raise serious antitrust concerns. AA and BA, without substantial divestitures, would be insulated from meaningful new competition at Heathrow and could raise fares."
Under the proposed alliance scheme, American and British Airways would be a whopping 300 percent larger than the nearest competitor on U.S.-U.K routes, with nearly 81 percent of all U.S.-Heathrow travelers seeing competition reduced or eliminated. Proposed combinations among AA-BA and United-bmi (British Midland) would create a level of U.S.-London Heathrow seat concentration greater than a merger between the six largest domestic U.S. carriers or combining the top 21 European airlines.
Today’s filing comes two days after two former high-ranking DOT officials said in their own DOT filing that they were concerned an AA/BA alliance was "likely to harm competition and lead to higher fares for consumers in numerous U.S.-London and U.S.-Heathrow city-pair markets."
Also filing in opposition to the proposed AA/BA alliance are civic parties from New Jersey, Houston and Cleveland.