Even a maverick like Richard Branson is forced to admit that joining an airline alliance is fast becoming a "fact of life". Speaking during Virgin Atlantic's inaugural flight to Chicago, he revealed that contacts have taken place with three of the global groupings.

"It's inevitable that we'll end up linking with someone at some stage, in some form," he says, more with an air of resignation rather than any real enthusiasm. Branson, an arch opponent of the British Airways-American Airlines link, still maintains that the global groupings are basically "anti-competitive", but becoming hard to avoid. His comments came just as British Midland signed with Lufthansa, effectively scotching Virgin's flirtation with a merger with its fellow independent.

Although Branson declined to name which alliances are in the frame, the exclusion of the BA-led oneworld leaves little guesswork. Analysts believe that the two obvious contenders are the Air France/Delta Air Lines grouping, which has yet to bag its first high-profile member, and existing code-share partner Continental Airlines, still only semi-attached to the Northwest/KLM/Alitalia "Wings" alliance.

Branson also admits that Virgin has been hurt by the blood-letting on transatlantic markets over the summer, although he claims that the privately-owned group will stay profitable over the current financial year.

Meanwhile, Virgin's expansion is continuing apace. The London-Chicago market, worth some 1 million passengers a year, has been a long-standing target. That should be joined next year by the first direct UK flights to Las Vegas. Shanghai was added in mid-year and a weekly service to Cape Town comes on line in December. Further inroads into Asia are in prospect, with Delhi and Bombay high on a hit list.

Source: Airline Business