Virgin enters fray to oppose US Airways-American deal

Mon Nov 11, 2013 5:38pm EST
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WASHINGTON (Reuters) - Virgin America Inc won permission on Monday to file a brief with the court hearing the Justice Department's bid to stop a big airline merger, giving it an opportunity to argue for lower barriers to enter the U.S. market.

The government filed a lawsuit in August arguing that US Airways LCC.N and American Airlines AAMRQ.PK should be forced to scrap a proposed merger that would create the world's largest airline.

Virgin, noting that it was the most recent airline to enter the U.S. market, said in a filing that the proposed deal between U.S. Airways and American would further solidify already considerable impediments to new entrants.

"Virgin America will explain how this loss of competition could be mitigated by the defendants' agreeing to provide current and future LCCs (low-cost carriers) access to the networks behind the defendants' hubs," the company said.

Virgin said that it was prompted to enter the fight by remarks last week by Attorney General Eric Holder regarding a possible settlement.

It argued that any settlement focused on Reagan National Airport near Washington, D.C., New York's LaGuardia Airport and other key, busy airports would be inadequate to address competitive harms.

In recent years, San Francisco-based Virgin America has complained about the difficulty of acquiring takeoff and landing slots and gate access at airports such as Newark Liberty in New Jersey and New York's John F. Kennedy.

It began flights at Chicago O'Hare Airport in 2011 after a years-long effort to gain access there.

Southwest Airlines Co (LUV.N: Quote) has also asked for and won permission to file a brief. It is expected to argue that American and US Airways should be forced to sell slots at Reagan National and LaGuardia -- slots Southwest has said it would like to acquire.   Continued...

Virgin planes are parked next to each other at Kingsford Smith airport in Sydney August 30, 2013. REUTERS/Daniel Munoz