BMI
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At a guess, proof they can pay? It has been the one thing that seems to have been an issue for a while, so I suppose Lufty would want some comfort that they can complete the sale and meet the CAA requirements...
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A bit of a long shot - but would Virgin Atlantic not be interested in BMI Regional (obviously presuming IAG cant influence who gets it?). If, and its a big if, they can get enough slots at Heathrow, a fleet of Embraers could easily serve a domestic and northern european route network to feed the long-haul routes. With lower operating costs than the Airbus they might even be able to compete directly with BA.
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It's true that a feeder operation for Atlantic might not be such a bad thing for Virgin - it would certainly help to keep numbers up on long-haul routes. However, hubbing from abroad via London is becoming rarer these days due to APD - many people transitting through European airports find it cheaper to do so via Frankfurt, Schiphol or even Istanbul. However, as a domestic and local European feeder it could do quite well.
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Regional uses mainline slots and so they hold none of their own, consequently a new buyer would have to start at LHR from scratch with an aircraft uncomfortably small for the competitve environment. VS have have had twenty years at LHR and they still have no feed.....
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However, hubbing from abroad via London is becoming rarer these days due to APD - many people transitting through European airports find it cheaper to do so via Frankfurt, Schiphol or even Istanbul.
Chieftan o'the Pudden Race
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Operating a 50 seater jet into LHR is not viable. As has been mentioned bmiR dont hold their own slots either, so VS will probably not have any interest.
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A bit of a long shot - but would Virgin Atlantic not be interested in BMI Regional (obviously presuming IAG cant influence who gets it?). If, and its a big if, they can get enough slots at Heathrow, a fleet of Embraers could easily serve a domestic and northern european route network to feed the long-haul routes. With lower operating costs than the Airbus they might even be able to compete directly with BA.
The slots are the big sticking point, and "if" regional airlines could get slots in Heathrow, a lot of things would be different.
But going beyond that: Virgin's yields are not where they need to be, even for point to point traffic. For connecting traffic e.g. continental Europe to US or Africa, they would be competing with the European home carriers' direct services as well as with a variety of other connecting options, all on established carriers through established hub operations using larger aircraft with much lower per-seat cost than Embraers. In other words, their connecting yields would be even lower than their point-to-point yields. These economics just wouldn't work on higher-seat-cost aircraft like the Embraer.
BD feed to VS is not minimal, it's true. But VS's LHR schedule is spread throughout the day, so the feed is from those routes which (a) have relatively high frequency and (b) have relatively few long-haul connections of their own (DUB, EDI, perhaps MAN). New continental European points are unlikely to meet either of these criteria.
And perhaps a further reason why VS would not be interested: they are as poor as a church mouse and can absolutely not afford a loss-making expansion initiative.
Here's an idea for a (perhaps?) more rational VS expansion: VS could make a play for the LHR slots which the competition regulators will tell IAG to divest, which IMHO will be specific to the LHR-EDI and LHR-MAN routes (as well as perhaps Moscow, Cairo, etc.). They could find an existing A320/737-family operator interested in taking on a Virgin franchise to operate those two domestic routes (and maybe Moscow?) out of LHR. Result: Virgin keeps their feed and grows their network with no cash-out to them - on the contrary, they get a franchise fee. And some other operator gets to use the Virgin brand (and existing BD-VS feed traffic) without having to build their own brand.
C.
Last edited by Cyrano; 21st Jan 2012 at 22:48. Reason: My initial response was rather too grumpy. I didn't set out to be offensive and I apologise if it sounded that way.
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Where did Virgin come from all of a sudden?
BMIr have been bought by the private investor group "Granite" subject to finances.
What is uncertain is where the finances will come from and / or what the timescales of completion will be.
BMIr have been bought by the private investor group "Granite" subject to finances.
What is uncertain is where the finances will come from and / or what the timescales of completion will be.
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within BA/IAG and it no longer wishes to work with VS.