Virgin America may file a complaint with US regulators alleging anti-competitive practices by United Airlines at Newark Liberty International airport near New York City, says Virgin Group founder Richard Branson.
Branson tells Flightglobal today that the complaint, if filed, would be a response to United's rapid expansion at Newark following the arrival of Virgin America at the airport.
Virgin America, which is part-owned by minority shareholder Virgin Group, launched three daily flights from Newark to both Los Angeles and San Francisco on 2 April.
United flies seven times daily from Newark to San Francisco and six times daily from Newark to Los Angeles, according to Innovata.
By June, the airline is scheduled to have 16 daily Newark-San Francisco flights and 14 daily Newark-Los Angeles flights.
Branson calls United's move "incredibly anti-competitive" and predicts it will cost United, the dominant carrier at Newark, $150 million yearly. He said that amount includes $130 million for adding new service and $20 million for matching Virgin America's fares.
"It's old-style American airline management," Branson says of United's decision to add flights. "It won't succeed. They will be the losers. They certainly won't drive us out of Newark."
Branson was speaking to Flightglobal after speaking at Virgin America's launch event at Newark today.
He told a crowd of several hundred people that prices on the Newark-Los Angeles and Newark-San Francisco routes were "astronomically high" before Virgin America's arrival. Since the carrier started Newark service, fares on its Newark routes have dropped 40%, says Branson.
Virgin America chief executive David Cush tells Flightglobal that ongoing consolidation in the US airline industry, while good for airline companies, could heighten anti-competitive practices.
He says three large airlines - Delta Air Lines, United Airlines and a merged American Airlines-US Airways - will likely avoid competing directly with one another and instead focus on squashing newcomers.
United declines to comment on Branson's comments about the possible anti-competitive complaint.
Source: Air Transport Intelligence news
