Virgin Atlantic is expressing its dismay (formally) at the British Airways / IAG purchase of BMI from Lufthansa. 

This, of course, surprised absolutely no one except, perhaps, some lonely person staffing a North Pole research station. 

The truth is, Virgin Atlantic wanted BMI and Lufthansa didn’t want to sell to Virgin.  The perception is price but I do wonder if there wasn’t more to it than that.  The purchase by IAG is a good move as it allows British Airways to become an 1800 lbs gorilla instead of a mere 800lbs gorilla.  I honestly think the EU will allow that purchase to go through with, perhaps, a requirement that a token number of slots at Heathrow be sold.

I also think that Virgin’s argument that Scotland will be hurt by this purchase is disingenuous at best.   First and foremost, I’m not sure the rest of the EU including Britain cares very much about what happens to Edinburgh or Glasgow or Aberdeen.  Second, this isn’t about Scotland and Virgin would do much better to make the argument that it is about slots at Heathrow.  Slots that are extremely valuable and which constrain competition over and over again. 

One has to wonder why if Virgin is so concerned for Scotland’s welfare, it doesn’t buy some aircraft and run the routes itself.  In fact, I’ve been wondering for 2 years why Virgin doesn’t just operate a LCC carrier in Europe a la Virgin Blue but it doesn’t.  It did once buy a Belgium airline and operate an LCC carrier in Europe from Brussells but that adventure wasn’t successful.  Primarily because it was hubbed in Brussells and it was a purchased operation that didn’t itntegrate with Virgin Atlantic. 

For some reason, Sir Richard Branson and Virgin Atlantic seem quite afraid to organically build a domestic branch inside the UK and if it is reluctant to do so, why should anyone care about them in the BMI deal?

Filed under: Airline News by ajax
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