Branson crabby over consolidation

The Virgin boss's 'monopolies' bitching with BA may be a sign of things to come.

by
Last Updated: 31 Aug 2010

Ol' Beardy is at it again, showing an appetite for punching above his weight that should stir the souls of many entrepreneurs. Not content with chucking his hat into the ring for the Gatwick sale, for which there's a whole queue of deep-pocketed Middle Eastern types already lining up, he's also still David-like, flinging rocks at the giant BA over the issue of competition (although wiry CEO Willie Walsh makes an unlikely Goliath). The two companies have a long history of antagonism, from the 'dirty tricks' scrap of the 80s to the recent fall-out over fuel surcharge price fixing.

In this latest installment, Branson warned both American presidential candidates against BA's ‘monster monopoly', the proposed all-conquering tie-up between the British flag carrier and American Airlines; Walsh pointed out that Branson knows a thing or two about running monopolies himself, adding that Branson's Virgin trains has an unhealthy dominance of the London-Manchester route. Branson didn't take this lying down, and this week accused Walsh of making ‘demonstrably false' comments about him and his business.

Branson may well have a point in the monopoly debate - a BA-American Airlines behemoth would dominate six key routes out of Heathrow. But we can't help feeling he'll struggle to find a sympathetic ear: people's minds are on bigger economic issues right now. And given the state of the global financial system, such consolidation is something we'll all be seeing a lot more of in the coming months. The same trends we're seeing in aviation, and of course this week in banking, may well become more familiar to across the board in a bid to weather some treacherous fiscal storms.

Elsewhere in the skies Ryanair boss Michael O'Leary has said that if the oil price stays below $100, Ryanair should break even at the end of this year. We know that strictly speaking O'Leary isn't an entrepreneur, having not founded the company, but he certainly behaves like one. It's a sign of the tough times that such an ardent capitalist as he should be pleased at the prospect of only breaking even. 

These are conditions in which small businesses can expect some tough choices - whether to give in and join the Goliaths of their sectors or dig in and keep slinging those stones.

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