BA consider response to rival link-up plan

British Airways executive Roger Maynard was behind his desk today studying the airline’s response to proposals of a Virgin-BMI link up.

Mr Maynard, who holds the key post of director of joint ventures and investments, will be “studying all the issues” before considering BA’s response.

He will discuss the issues with Rod Eddington, BA chief executive, and John Rishton, chief financial officer, before the board reacts to the threat of BA’s two biggest rivals at Heathrow joining forces.

A series of meetings will be held this week as the airline’s executives mull over their next move.

BA is understood to be considering making a bid for either Virgin Atlantic or BMI British Midland after the two groups last week confirmed they had held merger talks.

BA said it has been considering its position following Thursday’s announcement that Virgin and BMI had been discussing a range of “co-operation issues”.

Virgin is likely to be the more appealing to BA, as a bid for BMI would be likely to fall foul of competition regulators.

BA has 40% of take-off and landing slots at Heathrow and BMI has 14%, meaning a combined group would have over half of the available slots, and it is thought likely it would be forced to give some of these up.

But this issue would not be a problem if BA bid for Virgin.

BMI also primarily operates short-haul routes, while BA’s main business focus is long haul.

Meanwhile it emerged that Virgin had considered a takeover bid for BA earlier this year before it entered talks with BMI.

The group is understood to have got support for a possible bid, which it codenamed Project Balloon, from American private equity firm Texas Pacific Group, and it was being advised by Credit Suisse First Boston.

But it later decided to pursue talks with BMI instead.

A Virgin spokesman said: “We thought BMI looked marginally more interesting from the point of view of the business we could create.”

He added that there were less competition issues with BMI than there would have been with BA.