US ‘must embrace cross-border airline ownership’ says Branson


Sir Richard Branson has called on the US government to be “brave” and embrace cross-border ownership of airlines and ensure that phase two of the open skies deal benefits European carriers.

Speaking at the launch of Virgin Atlantic’s hydrogen-powered limousine service in New York, Branson said that while phase one of open skies was welcome it did not go far enough. Until EU carriers are able to fly between US cities and US airline ownership rules are relaxed the open skies deal will be a “damp squib”, he said.

“The future of open skies depends on US Congress. It depends if they decide to be protectionist, which they can be, or if they decide to be brave. Prices will come down and jobs will actually be created, there is fear among unions in the US, but there is no need,” said Sir Richard.

Branson said that until the deal was ratified Virgin would not consider launching operations from European cites, not least because the airline doesn’t have enough aircraft.

“Once the Dreamliner arrives and if open skies is ratified we’ll look at launching European services, but not for two or three years,” said Branson.

Virgin Atlantic chief operating officer Lyell Strambi said that it was up to the US and the EU to set the agenda for the airline industry around the world.

“The breakthrough we are looking for is around the ownership of airlines. Our industry is one of the most outdated with outdated protectionist strategies holding us back. If the industry is to move forward we need cross border ownership,” he said.

Strambi went on to dismiss the arrival of open skies at the end of March as a “damp squib” and warned airlines seeking to operate transatlantic routes out of Heathrow in the wake of the deal that they will face a “formidable” task.

“Open skies will not bring sweeping overnight change, because new entrants to Heathrow face the same formidable task of obtaining slots that holds back Virgin’s growth,” he said.

“Any new carrier operating on transatlantic routes will find it difficult to gain a toe-hold. Operations into and out of Heathrow are challenging, as it remains one of the costliest and most congested airports in the world.”