Transatlantic air fares need referral to OFT.
Financial Times - 23rd March 2000
Richard Branson argued recently in your columns ("Open skies, not closed minds", February 29) that there will be no breakthrough in open skies negotiations with the US unless the European Union becomes involved.
This seems rather a pessimistic view, but since the recent unsuccessful talks between the two governments centred on the opening up of Heathrow, and Sir Richard is the head of one of only four airlines (two British, two American) currently permitted to use the airport as a base for flights to North America, he may have his own perfectly good commercial reasons for taking this view.
He refers in his article to the problem of dominant airlines abusing their position, and as representatives of the London business community we have for some time been concerned at the high price of transatlantic business fares from Heathrow, especially in the light of BA's decision to reduce the number of economy vis a` vis business passengers.
The fact that the four airlines' tariffs are often almost identical and far higher than comparable tariffs from other big European cities suggests that the full benefits of competition are not being felt.
As we have said in a letter to Stephen Byers, it is "simply unacceptable that a business class fare from Heathrow to Boston should cost £3,244 return, but from Milan only £1,491, and that a business fare from Heathrow to Chicago should cost £4,078 but from Madrid only £2,031".
We have therefore asked the secretary of state to refer the matter to the Office of Fair Trading.
As for Sir Richard, surely one of the outstanding entrepreneurs of his generation, we are confident that a referral by the government would serve only to strengthen his commitment to do what as a businessman he has always done best - to meet the needs of the consumer - and we look forward to being able to book one of his package holidays to the moon in the not too distant future.
In the meantime, perhaps he will begin to offer more competitive rates from his Heathrow slots.
Dr. Charles Tannock MEP (Con)
Theresa Villiers MEP (Con)