Virgin Attempts to Block BA-American-Iberia Deal

Virgin Atlantic President Richard Branson gives a press conference at Heathrow Airport, west of London on September 12, 2008 to speak out against the planned merger of British Airways and American Airlines.

(Ben Stansall/AFP/Getty Images)

Virgin Atlantic Airways boss Richard Branson vowed to spend millions of dollars if necessary to block a proposed alliance of British Airways PLC, American Airlines and Spain's Iberia SA as he began a publicity blitz against the deal on Friday.

At Virgin's hangar at Heathrow Airport, Branson unveiled the slogan "No Way BA/AA," which will be plastered on the side of the carrier's planes.

Branson is also planning a major advertising campaign to highlight to regulators and consumers Virgin's argument that the alliance will push up prices and squeeze out competition.

BA, AMR Corp.'s American and Iberia announced a revenue-sharing deal in August that — if approved by regulators — will see the trio set prices together and share seat capacity on trans-Atlantic flights.

Related

BA, American and Iberia sign deal

The Silver Lining in Airline Mergers

WATCH: Nightline Webcast: Richard Branson's Dreams

The agreement is the closest alliance the trio can form under strict U.S. airline ownership laws that all but rule out a full merger and follows two earlier failed attempts by BA and American to forge closer ties.

"What BA and AA want to do is effectively merge and that will reap unbelievable damage," Branson said Friday. "It's like allowing Coca Cola and Pepsi to merge. It's unthinkable that a competition authority could allow such a merger to happen."

U.S. and European authorities have to approve the deal, which would form an alliance on a combined route network serving 443 destinations in 106 countries with 6,200 daily departures.

Branson said the union between BA and American would lead to price-fixing and force travel agents to send business to the pair.

However, BA Chief Executive Willie Walsh said the industry had moved on since the introduction of the "open skies" agreement between the U.S. and the European Union came into force in March, allowing airlines to fly to and from any point in the U.S. and any point in the EU.

"These arguments are old, they are out of date, it's time to move on," Walsh said of Virgin's complaints.