Virgin Atlantic Confirms Talks For Purchasing bmi

Virgin Atlantic, a transatlantic carrier, has confirmed that they are in talks with Lufthansa in regards with buying bmi (British Midland Airways). The airline said in a statement yesterday that the talks may or may not end in an deal, which could mean a straight purchase of bmi, a merger between the 3 airlines, or a swapping of some of Virgin’s stake as payment for the agreement; and they will make further announcements on the deal in due time.

On October 29^th, Lufthansa, a Germany-based carrier, said that they planned to purchase a controlling hold in bmi, following the chairman of the United Kingdom airline opting to sell the company. Lufthansa is set to gain slots at the London Heathrow Airport, which is where bmi is one of the largest operators, next to British Airways.

No matter what the eventual deal is, Virgin Atlantic is aiming for a slice of the market share in British Airways. They have coveted the 12% share of take-off and landing slots that bmi has at London Heathrow Airport, along with their mid-haul network that offers a number of synergies. There have been 2 merger attempts with bmi by Virgin Atlantic in the past. However, talks failed over differences and valuations between Sir Richard Branson, the owner of the group, and Sir Michael Bishop, the Chairman of bmi.

Even though Branson argues that a merger between British Airways and American Airlines may lead to travel agents being forced to give them business, as well as price-fixing, he said that their bmi proposal will not harm the competition, since the 2 business will not overlap. Steve Ridgway, the Chief Executive of Virgin Atlantic, says that many people have speculated that the combination of Virgin Atlantic’s and bmi’s networks makes sense, and now they have the opportunity to achieve that, as well as create a more effective competitor against British Airways.

Learn more about the airline at: www.virgin-atlantic.com