Virgin & bmi - would a merger make sense?
Posted: 26 Aug 2008, 12:16I think the two brands together have been mentioned before - is it something that would work for them?
Do you think it would happen?
Do you think it would happen?
This has been mentioned numerous times before, if you do a quick search lots of threads come up. It also seems to be the medias favourite possible merger when its a go slow news day.
The point is that it not as easy as one would think.
The credit crunch is hitting big companies hard and as such M&A deals are down.
LH and SAS both have a large interest in BD and as a result would need to be consulted if any takeover/merger was to take place.
SMB is also unlikely to want to sell 'his baby' just as SRB is unlikely to want to sell 'his baby'.
If (and if is the key word) they did merger then the most likely scenario would be LH to take a stake in VS and the airlines would be brought together. Of course SQ seem to now be happy with their 49% stake and SRB isn't about to loose control of VS so there are a number of huge barriers to overcome.
One worry of course would be that a mergerd airline would just be used to increase the amount of LH to MH destinations operated by the carrier, so routes such as LBA-LHR would be lost to allow the slot to be used for something else.
Of course there is a long way to go, first of all there would need to be closer co-operation between the carriers and I don't think VS would be that keen on joining *a.