UPDATE: Virgin Air Accuses AMR Of Hypocrisy Over JAL Comments
(Updates with comment from American Airlines, starting in the 7th paragraph)
By Doug Cameron
Of DOW JONES NEWSWIRES
CHICAGO -(Dow Jones)- Virgin Atlantic Airways accused arch-rival American
Airlines of "hypocrisy" Thursday as it joined the mounting battle over the fate
of Japan Airlines (9205.TO, JALSY).
The U.K. airline jumped on recent comments from Gerard Arpey, Chairman and CEO
of American parent AMR Corp. (AMR), warning that JAL, owned by Japan Airlines
Corp., could face insurmountable regulatory hurdles if it left American to join
Delta Air Lines Inc. (DAL) in its SkyTeam alliance.
The U.K. airline has been the staunchest opponent of American's separate
efforts to secure antitrust immunity for its own Oneworld alliance.
Arpey this week cited the market share of a combined JAL-Delta on routes
between the U.S. and Japan, as well as congestion issues at Tokyo's Narita
airport.
Virgin, in a regulatory filing, said that American and British Airways PLC (
BAY.LN, BAIRY) would have an even higher share of routes between London and the
U.S., maintaining that Heathrow was even more congested because of slot
constraints.
"The Department [of Transportation] should not countenance this hypocrisy,"
said Virgin in its filing.
American dismissed Virgin's intervention as "long on accusations and rhetoric
and short on the facts", providing contrasting data on market concentration and
slot holdings.
"We are opposed to a JAL-Delta tie-up for the same reason we are confident our
trans-Atlantic immunity application will be approved: to preserve and enhance
competition," said a spokesman.
American and some of its Oneworld partners are awaiting an initial ruling from
U.S. regulators for their application for immunity to deepen trans-Atlantic
cooperation. European authorities are also examining the plan.
While it awaits word on the application, American has intensified its public
lobbying this week to retain loss-making JAL as a partner in Oneworld amid the
rival offer from Delta.
Delta's proposal to cover JAL's transition costs from Oneworld and indemnify
it against any lost revenue is likely to include financial backing from other
SkyTeam members, notably Air France-KLM (AF.FR, AFLYY) and Korean Air Co. Ltd (
003490.SE), according to people familiar with the situation.
Both have existing partnerships with the Japanese carrier, unlike Delta.
American has not said whether other Oneworld members such as British Airways PLC
or Qantas Airways Ltd. (QAN.AU) might contribute to its proposed investment in
JAL, which could also include TPG, the private equity group.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com
(END) Dow Jones Newswires
11-12-091451ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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