Virgin to make a move for bmi?

VS claim LH will be tempted by their lower priced deal as it will not be subject to regulatory scrutiny

A gamble with very long odds?

Now on the BBC

Sealing the Seer says:

Virgin will take a look at the books and run a mile.
But not before making a lot of noise and getting a few dozen slots....

Sealing the Seer says:

Virgin will take a look at the books and run a mile.
But not before making a lot of noise and getting a few dozen slots....

But what aircraft will they use to fulfil any new slots?

But what aircraft will they use to fulfil any new slots?

In my humble opinion VS needs 70 slot pairs a week to use all the aircraft it has on order and retire some, maybe a little more. 70 slot pairs would enable the remaining A333s to join the LHR fleet for example, and then expand to targeted destinations, while bringing back some double dailies like HKG.

Integrating the whole of BD - with it's unaligned route network, inefficient operations, black hole in terms of cash bleed, pension liabilities, high cost structure for leased aircraft, etc. is something I find bizarre for VS to really consider.

My personal point of view is that if VS is successful in its bid, it will keep up to 100 slot pairs, the BD A330 trained crews, and seek to sell everything else (mostly to BA) to recoup the cost and ensure VS isn't left with a long term black hole.

Otherwise it will need very deep pockets to the tune of 100s of millions of pounds to manage a turnaround in BD, and I fear that will be a failure, and will lead to the failure of VS. Think about it, BD is losing up to £200m a year, has a pension hole of another £100m+, then VS needs to spend money to acquire, to lay off staff, to turn it around in terms of operations into profit ... that will not take overnight, let's say up to two years; we're talking £600-700m+ in spend. I mean VS, seriously?

VS just bidding to show they are still a player, get some additional media and back out later on. They'll then kick off.. crying wolf about BA winning and taking over the world, whilst doing so keeping the "brand" in the papers.

If I was a betting man, I'd expect no news for atleast 12mths and VS not following through..

But what aircraft will they use to fulfil any new slots?

In my humble opinion VS needs 70 slot pairs a week to use all the aircraft it has on order and retire some, maybe a little more. 70 slot pairs would enable the remaining A333s to join the LHR fleet for example, and then expand to targeted destinations, while bringing back some double dailies like HKG.

Integrating the whole of BD - with it's unaligned route network, inefficient operations, black hole in terms of cash bleed, pension liabilities, high cost structure for leased aircraft, etc. is something I find bizarre for VS to really consider.

My personal point of view is that if VS is successful in its bid, it will keep up to 100 slot pairs, the BD A330 trained crews, and seek to sell everything else (mostly to BA) to recoup the cost and ensure VS isn't left with a long term black hole.

Otherwise it will need very deep pockets to the tune of 100s of millions of pounds to manage a turnaround in BD, and I fear that will be a failure, and will lead to the failure of VS. Think about it, BD is losing up to £200m a year, has a pension hole of another £100m+, then VS needs to spend money to acquire, to lay off staff, to turn it around in terms of operations into profit ... that will not take overnight, let's say up to two years; we're talking £600-700m+ in spend. I mean VS, seriously?

I think if Virgin did that, BA/IAG would simply not entertain buying what's left of BD.

A point that is often overlooked is the profile of BD's arrivals/departure slots at LHR. Most of their slots are geared towards short-haul operations (ie departures first thing in the morning and arrivals later in the day). This is the exact opposite of what you need for long haul operations. So 70 weekly slot pairs is probably pushing what you can extract from BD's slot portfolio for long haul operations.

BA/IAG is in a slightly different position because they have such a large portfolio of slots at LHR already, so they can easily rejig schedules and reallocate slots to release slots from the combined portfolio for long-haul operations.

Also, detail of any VS deal is obviously very scant. But if the VS deal is to be funded by a third party, I wonder whether BD will effectively remain a separate airline from VS, just operating under the VS brand, so as to ring-fence VS from any risks of the rebranded BD failing.

[Scrooge]

What I would like to see is a joint bid (will never happen) let BA and VS carve up BD, assume pro rated liabilities and costs.

VS may have made a move, how serious that was is anyone's guess, but IAG (BA) has it, see here.