Virgin Atlantic still interested in rival bmi

By Pete Harrison

LONDON (Reuters) - Richard Branson's Virgin Atlantic VA.UL said it remains interested in snapping up rival bmi BMID.UL, but a bmi spokeswoman reiterated on Friday that the carrier was not interested.

Virgin Atlantic spokesman Paul Charles played down media speculation merger talks were imminent, but said Virgin had kept an eye on bmi ever since the two companies unsuccessfully explored a deal in 2003.

"We watch developments in the whole industry, not just one airline," he added. "We've been linked to bmi many times in recent years."

Bmi Chairman Michael Bishop was quoted in the Daily Telegraph on Friday as denying his firm was a bid target. The bmi spokeswoman added that bmi's position -- that it was not interested in a takeover bid -- remained unchanged.

Virgin Atlantic -- 51-percent-owned by Branson and 49-percent by Singapore Airlines (SIAL.SI) -- plans to expand vigorously after European ministers agreed a deal on Thursday allowing EU airlines to fly from any city in Europe to any U.S. city, and vice versa.

Virgin could add flights to the United States from Paris, Frankfurt, Milan, Zurich, Amsterdam and possibly Madrid within two years.

Bmi, which holds 12 percent of the take-off and landing slots at Heathrow airport, plans to add two or three routes to the United States each year.

"The rationale for any deal between a longhaul carrier and a shorthaul carrier is that the shorthaul carrier could feed passengers into the longhaul network," said Virgin's Paul Charles.

Bmi's Bishop owns 50 percent plus one share of the company, while Germany's Lufthansa (LHAG.DE) has 30 percent minus one share and Scandinavia's SAS (SAS.ST) owns 20 percent.