Virgin Atlantic Airways president Sir Richard Branson reluctantly accepts that his airline may be forced to seek out partnerships to compete with the likes of British Airways and American Airlines.
"Ultimately we may have to [consolidate]," said Branson during Virgin Atlantic's inaugural flight between London Heathrow and the Ghanaian capital Accra.
"If the playing field is so tipped against us that it is almost impossible to be an independent airline, we may come to a position where we have to consolidate. But this is not something we want."
Speaking to ATI sister publication Airline Business, Branson said it was too early to say with whom Virgin might team up.
Branson has vocally campaigned against the proposed British Airways-American Airlines transatlantic venture, as he believes this will reduce competition.
He highlights the BA cabin crew strike and says: "If BA and American Airlines were one airline and they went on strike together, that would leave Virgin, United and one or two airlines to look after all the passengers. The damage to the economy would be massive."
Branson nevertheless still sees potential in a tie-up with Lufthansa-owned BMI, although Lufthansa is committed to retaining BMI at least while it restructures the loss-making UK airline.
"There is a lot of logic in the two of us tying up," says Branson. "I don't think BMI has a future as a standalone airline so I think, at some stage, something will happen there. I think the two of us will be stronger together, rather than separate."
One of Virgin's motivators for courting BMI is the airline's slot pool at London Heathrow. This need has recently been intensified, as the new UK Government has blocked a third Heathrow runway.
Virgin is using all its Heathrow slots and cannot obtain fresh ones. Branson says that, to begin a new route, Virgin has to close another. Its new Accra route came at the expense of its Mauritius service.
"This is holding Britain back," says Branson. "I think that [the Government is] mistaken, but I don't think they are going to change their mind, so we will just live with it. We have made our views known, so there's not a lot of good in banging on about it now."
Virgin is using leisure routes instead for expansion. Around 70% of Virgin's operations are from Heathrow and 30% are leisure services from Gatwick.
But chief financial and commercial officer Julie Southern says this will become more even as a result of constraints at Heathrow. She adds that this mixed passenger base will also reduce Virgin's dependence on any particular passenger type.
Source: Air Transport Intelligence news
