Virgin Causing Trouble at Heathrow?

Discussions are currently underway between Lufthansa, owners of 80% of BMI and Virgin Atlantic, part of the Virgin group. The talks involve the sale of BMI, once owned by Sir Michael Bishop. The BMI group includes BMI, BMI Regional and BMI Baby.

Sir Richard Branson has on a number of occasions expressed his interest in linking his award winning, London based carrier with a short/medium haul carrier to create a hub and spoke system at Heathrow. BMI would be the answer.

The airline currently has the second highest number of slots at the UK’s premier airport serving destinations in the UK, Ireland, Europe, North Africa and the Middle East; the latter being quite lucrative for the company.

By linking Virgin Atlantic and BMI it would create a carrier with the power to compete more effectively with British Airways which currently has over 40% of the available slots at Heathrow. The link will make the newly formed carrier more efficient and open it up to a wider audience of over 1.5 billion people across the three continents all who will find it easier to travel with Virgin.

So what could it mean for aviation in London? This very much depends on the nature of the sale and the plans Virgin bosses have for the airline. It seems likely that Lufthansa will want to keep as many of the Heathrow slots as possible in the sale but many seems unlikely.

The most exciting scenario for passengers would be for Virgin Atlantic to either merge or reinvent BMI. This could involve not only connecting flights in London but also releasing a new cabin interior across the fleet. Using something very similar to the Virgin America cabin would put the airline streets a head of any carrier with short haul operations in Europe. This would mean personal IFE systems, mood lighting and a dedicated first class cabin on all short haul aircraft. It would also be expected that the long haul Airbus aircraft would be merged into the Virgin Atlantic fleet, cabin retrofitted with the Virgin branding and the current routes flown by their metal.

Another major benefit for the consumer would be the increased pressure that British Airways would feel. The carrier effectively has a monopoly on feeding traffic through the airport and for a serious competitor to pick up the competition and in flight service it would involve serious work by BA to compete and would almost certainly result in a fall in prices.        

The benefits to Virgin Atlantic will be a rise in load factor on many routes due to more passenger feeds and a wider market to sell their product to. The Airbus fleet will mix nicely with the growing sister ships at Virgin which will also make for a more comfortable fit.       

For this to happen it would involve serious injections of cash and in the current economy this seems unlikely but within the next five years, if a sale is possible – it may be feasible to say that you can board a Virgin flight Cairo and end up in New York with some of the best service on the market while paying a cheaper fare.