Laker crusades against air alliance

Sir Freddie Laker has challenged Prime Minister John Major to refer the proposed alliance between British Airways and American Airlines to the Monopolies and Mergers Commission.

Sir Freddie's intervention marks the start of a potentially damaging high-profile campaign against the Government, which could ultimately be joined by Richard Branson and his Virgin Atlantic.

Both Sir Freddie and Mr Branson have written to Mr Major arguing for the BA deal to be referred to the MMC. However, Sir Freddie has also chosen to take his campaign to the wider public by placing advertisements in national newspapers.

In his letter, Sir Freddie reminds the Prime Minister that his low-cost Skytrain was forced out of business in 1982 as a result of what he believes were aggressive and unfair tactics by other airlines.

"In 1982 the British and American flying public lost out," he says. "Transatlantic fares rose because BA and other members of the transatlantic cartel had little or no competition. The public had no choice but to pay the increased fares."

Sir Freddie argues that the draft undertakings to be given by BA and American in lieu of a reference to the MMC are mild and ineffective and will still result in the two carriers having a monopoly on transatlantic routes.

"With such an overwhelming monopoly the public and certainly other airlines will lose out again," Sir Freddie writes. "I believe both politicians and the public are being duped into believing this monopoly will be less powerful than it actually will be.

"This cosy cartel is an affront to fair play and equality."

In conclusion, Sir Freddie says: "Please, Prime Minister, remember the past. Make sure this merger is referred to the Monopolies and Mergers Commission. Because, should it be allowed to go ahead, the British flying public will have to live with its dire consequences for years to come."

Sir Freddie's letter comes as the Office of Fair Trading reviews comments submitted on the draft undertakings, which will impose restrictions on the BA/American alliance. Rival carriers from both sides of the Atlantic have condemned the undertakings as being too weak, demanded that the two airlines release more take-off and landing slots at Heathrow airport, and urged that the alliance be referred to the MMC.

BA insists that a referral will not be imposed and argues that the undertakings are already tough enough. It continues to believe that the regulatory issues in the UK can be resolved in weeks rather than months.