Branson challenges BA over Australian routes

Virgin Atlantic's Richard Branson is to launch another attack on British Airways with calls for an investigation into BA's partnership agreement with the Australian airline, Qantas.

Mr Branson's lawyers are preparing reports for the Civil Aviation Authority and the Australian regulators criticising BA's monopoly on routes from Heathrow to Sydney.

This new challenge comes as BA's chairman, Sir Colin Marshall, prepares to defend the airline against Virgin's "dirty tricks"allegations in the US.

BA owns 25 per cent of Qantas and has representatives on the airline's board. Mr Branson believes the arrangement enables them to act in unison and freeze out competitors.

Virgin yesterday announced an agreement with Malaysia Airlines to provide code-sharing, staff-sharing and joint marketing on flights to the expanding South-east Asian market. The deal will give Virgin access to Australia, but it wants to launch its own daily direct flights from Heathrow to Sydney. Virgin had been offered two slots from Heathrow to Sydney, but said this was not sufficient to run a viable service.

Mr Branson said: "BA and Qantas act in tandem on many different things. It has created a duo-monopoly. It will require a hearing at the CAA and with Australian authorities."

In the US Virgin has brought a £1bn anti-trust suit against BA, alleging that it monopolises Heathrow and uses its position to gain unfair advantage on transatlantic routes.

Mr Branson said: "BA has made it quite clear that they do not like competition. In any other industry, whether it be gas or telecoms, a regulator would have intervened against such a monopoly."

BA said flights to Australia were governed by the bilateral agreement between the UK and Australian governments, and Virgin's complaints should be addressed to the respective ministries.

The 10-year partnership deal with Malaysia Airlines could boost Virgin's profits by as much as £8m a year. The two airlines will launch a twice-daily scheduled service between Heathrow and Kuala Lumpur, with onward flights to Australia, from April.

Mr Branson said: "It is more of a partnership than the words code-share imply." Staff from both airlines will be present on all services and each flight will be coded as a joint Virgin-Malaysia Airlines flight.

Malaysia Airlines could gain an important link into the US through the deal. Mr Branson said he believed a decision by the US transport authorities on Virgin's code-share agreement with Delta was imminent.