As London-based carrier bmi was wrapping up operations there was a bit of a battle over who would get the opportunity to own the remnants of the company. British Airways ultimately acquired the carrier, along with its highly coveted landing slot portfolio at Heathrow, but not without loud protestations from Virgin Atlantic. In the end, BA "won" the battle. Sortof.
Authorities in England have decided to award to all the slots BA parent company IAG is divesting as a condition of the merger to Virgin Atlantic. It is only 12 slot pairs, versus the 40+ pairs which IAG will get to keep and distribute amongst BA and Iberia. But the associated burden for acquiring the slots is also much lower. Virgin Atlantic doesn’t have to deal with folding up the bmi operations or the debt that came with the acquisition.
Virgin Atlantic has indicated that the final details of their schedule will take a bit of time to iron out but they intend to launch short-haul feeder service to their Heathrow hub with these slots. They will contract with another airline to operate A320 aircraft for them on the routes, including multiple daily frequencies to Edinburgh and Aberdeen, Scotland. This service is in addition to the previously announced plans to fly to Manchester.
Maybe Virgin Atlantic didn’t win the battle. But is also doesn’t seem that they completely lost either.
Related Posts:
- Virgin Atlantic adding domestic service to its route map
- bmi confirms Star Alliance exit; only two weeks left
- bmi sale is final; restructuring imminent
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This would seem to increase the value of Virgin Atlantic to the Star Alliance – instead of mostly competing on the long haul routes, they are now bringing some feeder service to the table.
I’m not convinced still. Virgin Atlantic will have to operate the grandfathered slots for 6 IATA seasons before applying to change them.
And UK Domestic is a very tough market with the bottom eaten by EasyJet and Ryanair – and people not willing to pay a lot more than that these days.
It’s one to watch, but considering BMI made a loss of £36 per pax on these routes, I can’t imagine Virgin doing much better right now…
I would very much like Virgin to join Star Alliance. They need a presence in London.
If Virgin had been given the Moscow rights, you may have been correct. They are now in the odd position of being given slots at Moscow and Heathrow for Moscow flights, but they cannot use them because the UK Government has chosen easyJet (from Gatwick) to be the 2nd licensed carrier flying to Moscow.
Also worth noting that the record price for a Heathrow slot pair is US$50m, and in 3 years Virgin can claim that these 12 slot pairs are not viable on UK domestics and ask to use them for something else. For free.
Flights will also be wet leased ….
Virgin does attract some brand loyalty still and I should imagine that they are hoping to leverage this to fill these flights. They don’t have enough slots to run full blown shuttle services to Manchester, Edinburgh or Aberdeen so they will clearly not be targeting the point to point business traveller. If it’s just feeder traffic though, I wonder if their intercontinental service is sufficiently concentrated on time slots to make the service viable.
If, of course, they could add the intercontinental service of UA, US, AC, Air New Zealand, South African, Thai etc., then that would be a different matter….