By Jemima Bokaie, Marketing, 12 August 2008, 08:45am

Virgin Atlantic readies ad drive to block BA-American merger

LONDON - Virgin Atlantic will tell consumers why BA's proposed tie with American Airlines is against their interests, in a £3m ad campaign that is part of a plan to scupper the deal.

The campaign, which Sir Richard Branson's airline has said could break at any time, claims the merger will reduce choice and restrict price reductions. A Virgin spokesman said: 'It will demonstrate why a bigger BA is bad.'

Branson has written to US presidential candidates Barack Obama and John McCain claiming that 'the proposed alliance would damage competition on major transatlantic routes and leave consumers worse off'.

BA is expected to file for permission from the US authorities for the merger, which will give the airlines dominant market share on transatlantic routes, on Thursday. If the application succeeds, redundancies at both BA and American Airlines are likely.

The carriers have twice failed to create an alliance when regulators declared their plans anti-competitive. They argue that the tie is now acceptable because the competitive environment has been changed by the Open Skies agreement.

BA has also offered to surrender transatlantic slots at Heathrow to smooth the way for the plan's approval.

Virgin Atlantic is expected to complain to the ASA regarding BA's T5 press campaign, which it had to rewrite due to misleading punctuality claims.

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Gellan Watt - 12 August 2008

It's a good thing that businessmen like Sir Richard exist. He continues to challenge conventional thinking and businesses into working differently - and in his own way, sticks up for the little guy, at the same time as running a very successful number of businesses.