Third Heathrow runway dragging down slot values: Branson

Hong Kong
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Virgin Group founder Sir Richard Branson believes slot values at London Heathrow have fallen since the decision to build a third runway and the onset of the economic downturn, potentially affecting the value of UK Star Alliance carrier BMI which it has openly courted for many years.

Speaking to ATI during the London Heathrow-Hong Kong leg of his 'round the world in eight days' tour, Branson said: "I would love to attach short-haul to Virgin Atlantic, but I can't get the slots [at Heathrow] to do that. Maybe one day something might happen between Virgin and BMI to give us the short-haul network."

But he adds that Heathrow slot values have "slumped" since the UK Government gave its go-ahead for a third runway and airlines started making network cuts to ride out the economic storm. "Airlines are cutting back on routes, so nobody's acquiring slots anymore," says Branson.

Branson would ideally like to fill Virgin's European short-haul black-spot before the third runway opens around 2020 and he says "some sort of integration" between BMI and Virgin Atlantic is the logical solution.

He remains tight-lipped about potential developments, saying only: "Lufthansa will take complete control of BMI in March and we will see what they do with it. If we were talking I wouldn't be allowed to talk about it and, if we weren't, I'd have nothing to talk about.

"Some sort of integration of the two airlines would make sense. Virgin Atlantic would like the feed and we don't overlap on many routes. Passengers would like to see us together, but it depends on what Lufthansa wants to do with it."