Possible merger between Virgin Atlantic and BMI airlines

As British Airways, American Airlines, and Iberia announce plans to enter into a joint venture other airlines are considering similar strategies.  In order to stay competitive Richard Branson’s Virgin Atlantic Airlines is considering some type of merger with BMI airlines.  No official talks are said to have occurred as of yet but speculation on the future for both airlines continues to grow.

As other airlines are collapsing under strains of a poor economy and the rising fuel costs other airlines are merging together to stay afloat.  Richard Branson who is the president of Virgin Atlantic said “There is considerable logic in Virgin and BMI working as one. We do not overlap on routes, [and a possible merger] would give us a good short-haul network and give them a good long-haul network. By doing that it would create a more formidable competitor to British Airways.”

A takeover of BMI airlines has been possible for a number of years.  The lure of merging with BMI is that they have a large number of slots at Heathrow Airport.  The only other airline that has more slots than BMI at Heathrow is British Airways. 

“If Virgin is worried, then the public should be worried. Together, BA and AA will twist the arms of travel agents to give them business because of their dominant share of the market. With the business market, BA/AA will go to the JP Morgans and the Goldman Sachs who will have to use them because of their domestic networks, transatlantic networks and European networks. It will be sheer monster monopoly dominance,” he said.

www.virgin-atlantic.com