Virgin Atlantic says regulators should focus on why BA and American Airlines are missing out millions of passengers

Millions of passengers are missing from BA/AA’s stated numbers. Data presented by BA/AA doesn’t include direct bookings and connecting passengers, so their market share appears smaller. BA/AA’s presented data is based on just one month – July 2008 – rather than a whole year. Virgin Atlantic today said that the numbers used by BA and American Airlines, who are planning to create a monster monopoly on transatlantic routes, fail to give regulators or the public a true picture of their market share between London Heathrow and the US.  The data presented by BA/AA distorts the true picture of BA/AA’s potential dominance because it omits all bookings made direct with the airlines and omits all passengers making connecting journeys. This means BA/AA are using numbers which portrays their market share at around 20% below the true figure.

In their filings to regulators in Washington, BA and AA claim that their market share between Heathrow and the US is 43.6%. But the two airlines are using data which only measures bookings by travel agents and other airlines, which does not give a complete picture. It does NOT include direct bookings made by BA and AA passengers via the airlines’ websites, call centres and at airport ticket desks. These can be a significant proportion of bookings and, in our view, could easily exceed another one million passengers.

In addition, the data that BA and AA have presented does NOT include the huge volume of connecting passengers, around 4.3 million, who travelled on BA and AA transatlantic flights last year. Up to 57% of seats on a typical BA or AA long-haul flight from Heathrow to the US are taken up by connecting passengers (source: CAA 2007).

Virgin Atlantic, using data from the US Department of Transportation which measures passengers actually onboard flights, says that BA and AA together have a market share of 62% of passengers flying between Heathrow and the US, even higher between Heathrow and New York JFK, at 67%. Both Heathrow and JFK airports are severely restricted to new entrants, due to the lack of available slots and caps on new services.

Sir Richard Branson, President of Virgin Atlantic, said: “Where are BA’s missing millions? BA and American Airlines can run but they can’t hide their true passenger numbers. The US Government’s own data shows that BA and AA have a much larger and more dominant market share than they are leading us to believe. The regulators and the public need to look carefully at BA and AA’s numbers and take account of the millions of passengers missing from their filings.”

“With so many passengers, both BA and AA are able to use their dominance to ensure they have pricing power on transatlantic and other routes. They can strongarm travel agents into recommending BA flights, as they’ve been fined for doing in the past, even though BA/AA would be more expensive. Corporate customers would also be pressured into signing deals because of the scale of BA and AA’s network. BA/AA would have a stranglehold on key routes out of Heathrow and on domestic routes both in Europe and the US.”
Sir Richard made his comments as he unveiled the first stage of Virgin Atlantic’s campaign against the planned BA/AA alliance. At the Virgin Atlantic hangar at Heathrow Airport, he unveiled the slogan which will fly on Virgin Atlantic planes. Virgin Atlantic is also planning a major advertising campaign to highlight to regulators and consumers why the planned alliance would push up prices and squeeze out competition – both against the consumer interest.

The true facts are: BA/AA would have nearly half of all take-off and landing slots at Heathrow Airport. They would also have nearly 60% of all frequencies between Heathrow and the US, according to OAG data. BA/AA’s share of total capacity on Heathrow – New York JFK would be 63%; Heathrow – Chicago 66%; Heathrow – Boston 79%; Heathrow – Miami 75% and Heathrow-Dallas 100%.


Source: Virgin Atlantic
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