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Virgin Fights British Airways/American Airlines Collaboration

Posted by Ben Berkon on February 15, 2010 05:32 PM

When it comes to booking a flight, most travelers ignore the airline brand and focus on which flight offers the lowest price – the cheaper, the better.

But Virgin Atlantic and its iconoclastic CEO Sir Richard Branson have a different view. They have long offered more amenities than any other airline in an attempt to not only woo passengers, but to actually make one’s time in the air enjoyable. Virgin isn't offering just a flight, but an experience.

However, with British Airways and American Airlines on the verge of securing a mutally beneficial collaboration, Virgin might find it more difficult to afford its unique brand. While Branson has called the impending airline marriage “a kick in the teeth,” he’s really not far off. The merger would enable the two giant carriers to “cooperate in ways normally forbidden under antitrust laws as collusion, such as coordinating fares and schedules.”

Branson and other Virgin executives have stated – in many ways, most notably it's "No Way BA/AA" campaign (above) – that the US Department of Transportation must remain resolute and continue to keep British Airways and American Airlines separate, despite the poor economy. Even though the new competitive outlook could result in lower fares for passengers in the short term, it could have greater negative effects in the long run as carriers like Virgin eventually go bankrupt.

Comments

Shashank Nigam Singapore says:

I think the time has come for Virgin to join an alliance - either Star Alliance or even it's own Virgin global alliance (Virgin Atlantic + Virgin America + Virgin Blue + V.Australia). Because as you rightly mentioned, they will not be able to stand alone in the BA/AA environment

February 16, 2010 11:06 AM #

Mickey Australia says:

Agree with Shashank,
the writing has been on the wall for years now that global alliances, code share arrangements etc are the only economical way to move forward.
Lets face it, several of their brands, such as Virgin Blue & Virgin Australia are already involved in various code share arrangements, fare alliances etc so what is stopping the rest of the group coming in from the cold?
Surely not Mr Branson's decades old  (mostly justified) obsession with BA?
And whilst I'd count Richard Branson among the most brilliant branding/business people around today, I think maybe it's time to realise that perhaps the stand alone brand concept may just not wash in the economic environment carriers face today.

February 16, 2010 05:43 PM #

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