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WASHINGTON (Dow Jones)--Virgin Atlantic Airlines President Richard Branson said Thursday a proposed alliance led by AMR Corp.'s (AMR) American Airlines and British Airways PLC (BAIRY) would be "absolutely disastrous" for industry competition and threaten some carriers' survival, including his own.

Members of the Oneworld Alliance, including American, BA and others, are awaiting approval from the U.S. Transportation Department for antitrust immunity, which would allow them to cooperate on scheduling and revenue sharing.

Branson said such an alliance would be akin to a merger of Coke and Pepsi, adding that the alliance would give two industry giants unparalleled pricing and scheduling advantages over competitors.

While Branson characterized the alliance as a "merger" of BA and American, American contends that the alliance would not be a merger.

The result for passengers, employees and "fair and healthy competition will be absolutely disastrous," said Branson, speaking at a breakfast organized by the National Press Club in Washington. "It will be the end of red-hot competition."

Asked whether Virgin Atlantic could survive if a BA-American alliance is approved by U.S. regulators, Branson said, "It would be very difficult."

"I cannot guarantee Virgin Atlantic's survival if BA and AA are allowed to merge," he said.

-By Josh Mitchell, Dow Jones Newswires; 202-862-6637; joshua.mitchell@dowjones.com