BA to buy Virgin Atlantic - Sunday Times says
 

http://www.timesonline.co.uk/article...691126,00.html

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Paras one and two of this Business section leader read:

EXECUTIVES at British Airways will this week be asked to draw up plans for a dramatic bid for Sir Richard Branson’s Virgin Atlantic after it emerged that Virgin had come within a whisker of trying to buy BA.

Branson was close to making a full-blown offer to BA shareholders earlier this year — having started tentative talks with BMI British Midland, the airline chaired by Sir Michael Bishop.


We certainly live in interesting times.

WWW

He seems to always be smiling. Would be interesting to see him take over BA....Im sure a few of the exec types are sweating that one out......
BTW as one from the states, my best rides in the last few years have been on BA or Virgin......As a PAX they rate high with me.

Does SIA own 49 or 51% of Virgin?

If SIA sell is it game over?

L337

They own 49% I believe and the rest is in private hands much like bmi. It's only for sale if the owners want to sell.

I think BA would rather buy BMI than Virgin .

All down to slots of course but BMI have 4X the number .

I would hope that BA can buy KLM to get access to AMS with all those runways and nice terminal buildings but I doubt they would risk blowing their cash reserves on it .

IMHO BA would not be allowed to buy eithe ron various competition and slots grounds....

Doesn't mean they won't try - they always manage to upset some competition or Euro authority....

NoD

Wow - certainly we do live in interesting times!

About time the aviation industry realised the need for some consolidation or else someones going to go to the wall sooner or later.

Slots out of LHR as KFW has said would be very much at the forefront of managements mind - making BMI a very attractive aquisition. However scheduled shorthaul is already a struggling market, especially full fare. So I can't see BA wanting to take on more shorthaul routes at the moment.

However Virgin and it's large N.American market (Where BA makes most of it's money) is a very attractive proposition, as well as it's slots at LHR.

Anyway! All pie in the sky stuff. I can't see BA blowing cash reserves on buying up other airlines in uncertain times.

IMHO another great bit of self promotion from the King of free advertising Richard Branson. You've got to admire the guy, he certainly does have a flair for the dramatic!

Why buy Concorde? Just buy the parent company!!! lol!!

Maybe an interesting twist to this one. Should BA buy Virgin, would it not open the door to bmi for it's long fought for opportunity to operate U.S. flights from LHR? As I understand it the current Bermuda 2 agreement permits 2 UK airlines to operate the routes.

However, I can't see any of this happening. Sir Richard selling his airline to BA ... nooooo!

ES ;)

It's possible for BA to buy either airline and use paper instead of cash.

BA shareholders have already been shafted, diluting their holdings won't make mch difference now.

Gusty

Interesting that the Sunday Times' rich list from last month values the entire Virgin empire (that's the airline(s), music, trains, mortgages, phones, THE LOT) at £1.2 billion. The World's Favourite have about that much and half as much again available in cash. I know who my money's on.....

Singapore Airlines as 49% owners of Virgin would I am sure be very glad to get shot of their stake in Virgin as it has been a dead loss since the very beginning, not that the retiring CEO of SIA has ever admitted his failings and blames everthing and everyone else for his failures.

As I understand it in The Mail, there is a proviso. BA would ONLY make a move IF Virgin "or any other company" makes a bid for BMI. Puts a different slant on it perhaps.

Firstly, Shadowpurser,

Either one airline going bust or multiple airlines downsizing it always results in one thing, people losing their livelihoods.
Consolidation only ever helps those whose employment is most secure at the time anyway.

Generally speaking, I have to admit that I'm not a fan of Branson. In my experience those involved in business do not get to his level of achievement without using "sharp practice" at some point. This is a fact of life, so when he is continuously portrayed as the "peoples champion" etc. etc. I have to sigh. I recall when BMI first declared the possibility that it would operate transatlantic flights Mr Branson was amongst the first to object. That looks like stark hypocricy to me...considering the position his airline was in 15 years previously (looking to expand but restricted by BA)

I am not being critical of VA itself or its staff. The strengths of this company is its employees, not the publicity seeking clown of a chairman. I know a few of the original ex BA crewmembers that were there in the early years and set the foundations for the airline today. Branson needed them then, and therefore was obviously able to set aside his anti BA stigma at that time.

As for Concorde.....well, having worked on it briefly in my maintenance engineering days my view is that it belongs in a museum. Branson knows nothing about the practicalities of operating such a machine and the potentially massive costs. Still, he could buy the fleet at a realistic price (which is up to BA to set, they are the owners, regardless of paying £1 each for them), let Virgin pay Airbus tens of millions of pounds for engineering support, pay millions more setting up a maintenance line etc. and then watch his empire sink due to the weight of his own vanity and overconfidence. I'm not usually given to oubursts of this nature but I want to express my opinion. Thankyou.

What about buying Aer Lingus then?

The Oneworld partner has the 3rd highest number of LHR slots after BA and BMI. And is currently about to be given away by a Government which wants rid for a knock down price!

Oh and by the way, Aer Lingus is also making money hand over fist right now, has much more cost cutting potential, and numerous expansion plans in the running.

Now IMHO that would be a great buy!

Private Jet,

You accuse VS of having a "publicity seeking clown of chairman".Fair comment.....but what do you think BA are doing leaking this story to the Sunday Times?!I mean come on,do you SERIOUSLY think that BA are gonna buy Virgin out?
The way I see it,yet again,BA are playing catchup in the publicity stakes.Yes Branson does court a lot of unecessary attention,but it seems to do the job.Obviously people at BA have got the hump about the whole Concorde/BMI merger thing.....it would not surprise me if Messrs King and Marshall were behind this story in order to deflect some of the attention away from VS.
Unfortunately it seems BA have not learnt anything from their media dealings with Virgin and Branson in the early 90s.......they will never beat him in a straight publicity war (although straight has never been BA's way really has it?).
British Virgin Atlantic Airways?Do me a favour!!!

I'd guess an immediate loser following such a takeover would be the VS FEs as BA ditched the classics.

mr777 regardless of BA's dodgy practices in the past, it doesn't change the fact that he is indeed a 'publicity seeking clown of a chairman'.

BA's is just not publicity seeking.

I think the two sides in this VA BA argument should stop behaving like spoilt children.

Yippee! Does that mean we get his new holiday island off Queensland as well............:ok:

Whilst you could never say 'never', BA taking over VS seems unlikely for a number of reasons. There are only two shareholders in Virgin Atlantic (a private company): Singapore Airlines (49%) and Richard Branson (51%). While Sir Dickie always has an eye for the main chance, the idea of selling any of his shareholding to BA in anything other than catastrophic circumstances would, I think, be completely unacceptable to him.

As for SQ's shareholding, like a lot of people and companies in 1999/2000, they bought into VS at a time when industrial and financial confidence - in all areas of business - was unrealistically high, as we now know with the benefit of 20/20 hindsight. However, the events of 9/11, and the effect on VS (previously extremely profitable) and the other North Atlantic carriers, were not predictable, so I think it's unreasonable to accuse SQ of bad judgement. Did you or anyone else do so at the time?

For equally unpredictable reasons (Sars), SQ is financially struggling right now, while VS is trading at a small but significant profit (the final figures for 02/03 are likely to show £17m profit on £1.4bn turnover). The outlook for both airlines is extremely good compared to their competitors, and history has shown both to be innovative and fast-acting in securing market share and margins. SQ has deep pockets, and can survive its current troubles. I doubt it has any need to realise a 60%-75% loss (which would be added to its trading loss) on its £600m investment in VS by selling out, when the forecasts suggest that the investment will perform well in the future.

On the regulatory and competition front, I think it's unlikely that BA would be allowed to absorb Virgin (or bmi - the other idea that was floated over the weekend) unless there was some quid pro quo for another, established, European-based Atlantic operator. I doubt that BA, or the British Government, could stomach replacing Virgin at LHR with, say, Air France or Lufthansa. The idea that bmi would be allowed to set up long-haul in place of Virgin is, I'm afraid, laughable unless you happen to be a bmi employee!

There are all sorts of politics surrounding this story, and much of it is fairly impenetrable. Yes, BA needs to get some good press exposure to offset Branson's coups of the last few weeks, but I think the reality is that these are the first few hesitant steps in the dance that will bring a number of European carriers together. While BA, VS and bmi practice their moves against each other, the real targets could be further afield....

'While Sir Dickie always has an eye for the main chance, the idea of selling any of his shareholding to BA in anything other than catastrophic circumstances would, I think, be completely unacceptable to him.'

Did he not say that about his virgin music empire?, then someone offered him a pile of cash and he was off like a rabbit with his back pocket full of cash.

loyal to his employees you must be joking !