Things in the Sky

American and Virgin haven’t always gotten along, especially now with oneworld trying to obtain anti-trust immunity. So, when American CEO Gerard Arpey was talking about a potential Delta-JAL hookup and said that “if JAL were to change horses [from oneworld], we would certainly argue that they might not be allowed to even code-share, let alone have immunity with the dominant carrier in Narita,” Virgin was all over it. They sent out a press release, where Virgin Atlantic CEO Steve Ridgway was quoted as saying:

“Virgin Atlantic absolutely agrees with American Airlines that a high level of market concentration should be an insurmountable hurdle to obtain antitrust immunity for a possible alliance such as BA/AA. Mr. Arpey has clearly highlighted why dominant groups like AA and BA shouldn’t be given regulatory clearance. We have asked the DoT to further investigate his views as American cannot have it both ways.”

So, in response, American issued its own press release:

Once again, Virgin’s comments are long on accusations and rhetoric and short on the facts. American is opposed to a Delta-Japan Airlines (JAL) tie-up for the same reason we are confident our transatlantic immunity application will be approved: to preserve and enhance competition.

What’s funny is the different statistics the airlines use to try to prove their point. For example, Virgin says:

The Delta-JAL joint venture would result in a total capacity share on US-Narita routes of 54%, significantly smaller than the 64% share that BA/AA would hold on US-Heathrow routes.

And American says:

SkyTeam with a Delta-JAL combination would account for nearly 60 percent of U.S.-Tokyo passengers, as opposed to oneworld’s approximate 44 percent share of U.S.-London passengers.

In Virgin’s case, its more beneficial to refer to specific airports to make the numbers look better for their case.

Anyway – at least this is fun to watch! But really, I think that Arpey could have been a bit more careful when talking at the event to avoid giving Virgin some great material.