Virgin Atlantic has joined rival British Airways in declaring an interested in a deal with BMI British Midland.
Virgin showed its hand after BMI parent Lufthansa hired investment bank Morgan Stanley to explore its options and appointed a new chairman at the UK carrier to oversee a potential restructure.
“We continue to have a close interest in a combination with BMI,” Virgin said, adding that it currently works with the carrier at Heathrow, where the two are among top slot holders after BA.
Virgin founder Sir Richard Branson has been pursuing a merger with BMI for more than a decade, having explored the purchase of an initial stake bought by Lufthansa in 1999.
Virgin chief executive Steve Ridgway said in 2005 that a tie-up was “the great undone deal in aviation,” with the combination of his company’s long-haul routes with BMI’s short and medium-haul network giving the transaction “logic”.
BMI is the fourth largest carrier in the Lufthansa group with a fleet of 60 aircraft and 3,800 employees. It flew 2.75 million passengers in the first six months of the year.
Virgin holds about 3% of take off and landing slots at Heathrow, BA and Iberia, which the UK carrier bought to form International Airlines Group, hold about 43% and BMI controls about 11%.