Virgin Atlantic Says No to BA/AA Alliance - Essay Example

Steve argues that if the two airlines combine then they will operate 79% of all capacity operations between Heathrow and Boston. Operations between Heathrow and Chicago will be operating at 66% capacity if the two airlines combine. In addition, operations between Dallas and Heathrow would contribute to 100% monopoly if the two airlines combine. According to him, this is unethical and a move to kill other rising airlines. Steve suggests that the US owns 6 of the largest airline in the world. Steve suggests that forces of demand and supply should determine the economic trend.

Virgin Atlantic advocates for open and free skies operations. Heathrow is the largest airport in the world and connects almost half of all passengers traveling between America and Europe. Forming an alliance between these two airlines means complete monopolies will exist. This is the reason why Virgin Atlantic is against this merger. Virgin Atlantic argues that if the merger takes place, airline prices will increase significantly due to the monopoly aspect existing. The airline industry argues that it is protecting customer’s interests (Ridgway).