‘Monster monopoly’ to hit travel jobs

Tue, 19 May 2009

The “monster monopoly” that would be created if a merger between American Airlines and British Airways goes ahead will result in the loss of travel jobs, according to recruiters.

Last week, Sir Richard Branson, whose Virgin Group controls BA rival Virgin Atlantic, said in a statement that any merger between BA and American Airlines would damage airline competition on routes between London’s Heathrow Airport and the US creating a “monster monopoly”. The two airlines continue talks about a possible merger.

Julia Feuell, managing director at New Frontiers, told Recruiter that such consolidation was inevitable across the market.

“I think there is a perception that there has been an oversupply of routes and airlines in general. Going forward, this is what is going to happen; companies will merge and the low-cost carriers will not survive.

“You will find a cutting of jobs, and job losses where airlines have failed. The airline industry is going through a little turbulence.”

Ian Brooks, director at Gail Kenny Executive Search, adds: “In normal economic conditions, the North Atlantic routes are BA’s most profitable, with strong yields.

“A merger between these two giants would surely lead to higher prices and generally discourage incremental traffic between the UK and the US which has got to be bad for the consumer and bad for new job creation.

“In the current economic climate BA/AA would be more concerned with cutting capacity, which if a merger was allowed to go through they would be sure to administer through capacity cuts which in turn would cut jobs.

“Whichever way you look at it, such a merger has got to be bad for job prospects.”