Branson to spend millions to block BA/AA deal

By John Bowker

LONDON (Reuters) - Virgin Atlantic President Richard Branson said he was prepared to spend heavily to try to prevent a planned tie-up between British Airways Plc, American Airlines and Spain's Iberia.

"If it is approved we believe Virgin Atlantic will be damaged (along with) ... any smaller carriers on these routes," Branson told reporters on Friday, adding he would spend "millions of dollars" in a bid to block the tie-up.

He said he would start by painting "no way BA-AA" slogans on all Virgin's aircraft and would continue with an advertising campaign claiming the dominance of the alliance on key UK-U.S. routes will put up prices.

The comments are the latest in a series of disputes between Branson and British Airways Chief Executive Willie Walsh, who has accused the Virgin empire founder of getting his figures wrong about the extent of BA-AA dominance.

A BA spokesman said: "This application is good news for customers. They will gain greater access to discounted fares, smoother connections and more frequent flyer benefits," adding there was nothing to stop Virgin seeking its own partner.

But Branson said other carriers felt similarly about the proposed deal, which he argues is a merger in all but name.

"A lot of carriers are keeping quiet as they think that if BA and AA are effectively allowed to merge then anybody will be allowed to merge," he said.

MERGER TALKS