Virgin Atlantic eyes Moscow

It seems that Virgin Atlantic appears to be dusting itself off after the failed BMI takeover bid, with an announcement today that Virgin Atlantic is intending to build a short-haul and medium hub out of it’s London Heathrow base.

To do this, Virgin Atlantic is going to need the slots that were surrendered by British Airways/IAG.

Traffic between London and Moscow is regulated, with two Russian carriers and (up till the takeover), two British carriers

The Russian carriers were Aeroflot and TransAero, whilst the British carriers were BMI and British Airways. The vacating of BMI from the market leaves a slot open for a British carrier to commence services – subject to the bureaucracy.

Traffic on the London – Moscow run is continuing to grow, with traffic on the route trebling over the past 10 years, making it attractive to any newcomer.

As to the slots that British Airways gave up, Virgin feels it should have them all, so the airline it can create competition on short and medium haul routes, as well creating a feed for Virgin’s long haul network.

Some of the slots have been allocated already – namely to Transaero who used to code-share and operate the London – Moscow service as a joint service with BMI.

For Virgin to operate London to Moscow will require a rethink on how they operate the route – do they go down the line of operating as a long haul service using the resources that exist (for example, their existing 747, A340 or A330 fleet), or do they go down the line of a “Virgin America” operation which is much more of a LLC proposition… or somewhere in between.

Currently, there’s a mix options on this route with:

• Aeroflot operating Airbus A320’s and A321’s
• BMI operating A320’s
• British Airways operating Boeing 747-400’s and Boeing 767-300ER’s in long haul configurations,
• Transaero operating various different Boeing 737 subtypes (both Classic and NextGen)

Certainly there’s a lot to be done if they decide to go down this road.

Virgin Atlantic believe if they’re given the slots (which includes UK Domestic slots), they’ll be able to make money on what routes that were given up on due to the lower cost overheads that Virgin has compared to the old BMI. If that’s the case – or if this the usual Virgin bluster remains to be seen.

Still, it’s an interesting proposition