'No way, Willie' - Branson squares up to Walsh over Aer Lingus

Virgin Atlantic founder Richard Branson has hit out at the IAG/Aer Lingus deal, calling it 'absolutely the wrong thing' for competition.

by Andrew Saunders
Last Updated: 27 Jul 2015

Yes, old beardy, the punter's friend, is really getting his undies in a bunch over the proposed £1bn takeover of Irish national carrier Aer Lingus by his arch-rival and BA owner, IAG.

The billionaire - whose Virgin Group owns 51% of Virgin Atlantic Airways - told the Telegraph that the Irish airline should remain ‘independent’ and that the acquisition by IAG should not be allowed because it is anti-competitive and bad for the customer.

Now of course when it comes to anything to do with BA, Branson is hardly an unbiased witness - his beef with the airline dates right back to the infamous ‘dirty tricks’ campaign of the early 90s, and although current boss Willie Walsh had nothing whatever to do with that episode Branson has criticised him before, too.

But in this case Old Beardy may have a point. If and when IAG - which owns Iberia as well as BA - gets its mits on Aer Lingus it will have a pretty dominant position in the lucrative trans-atlantic market. Not least because of Aer Lingus’s nifty trick of allowing passengers to pre-clear the dreaded US immigration, in Dublin on flights from the Irish capital.

Branson’s biggest gripe however concerns Aer Lingus’s extremely valuable landing and take off slots at Heathrow. BA is already the largest single player at Heathrow and has historically regarded the airport with rather a proprietorial eye. Possession of Aer Lingus’s slots as well as its own would indeed leave it sitting pretty and make competitors lives that much harder.

Furthermore, if - and it is a big if - the Davies Report recommends a new runway at Heathrow rather than Gatwick, even the most ardent BA Gold card frequent flier would be hard pushed not to agree that competition for their business could be fiercer. (Although it is starting to look like the government considers itself too busy with a Euro referendum to worry about minor issues like vital infrastructure, and wants to duck the runway issue yet again. An outcome that would certainly be even more disastrous for all concerned).

But in his heart of hearts, Branson surely knows that there is little prospect of the bid being blocked (even though Michael O’Leary, who would also dearly love to buy Aer Lingus, is appealing the regulator’s ruling that Ryanair must sell down its stake).

Rather he is probably hoping for an outcome akin to that achieved when BA bought BMI back in the day. After a similarly tube-thumping PR campaign fronted by Branson, Virgin Atlantic ended up being awarded all of the 12 Heathrow slot pairs which the authorities forced BA to divest.

Now that’s what you call competition…

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