Virgin Atlantic Warns Rivals About Heathrow

Last Updated Mar 5, 2008 2:46 PM EST

Nobody will ever accuse Virgin Atlantic of rolling out the welcome mat to airlines looking to expand their presence at London/Heathrow. Though the Open Skies deal between the US and EU means that any US or European carrier can fly between Heathrow and the US, Virgin has decided to put out a press release saying it won't be easy.

Ok, so maybe they weren't exactly that kind. They used words more like, "new entrants to the US-UK market will find existing Heathrow carriers are more than ready to do battle." And why, exactly, are they throwing down the gauntlet?

Well, Heathrow is their livelihood. They've certainly done quite well under the existing agreement between the US and UK. Under that agreement, only two carriers from the US and two from the UK are permitted to fly transatlantic flights from Heathrow. When Virgin Atlantic was able to sneak in as the second British carrier, it was like a gold mine just waiting for them to take advantage.

Now that the airport is opening up, Virgin will lose a lot of that competitive advantage. Sure, they still have a fantastic product, but they aren't in an alliance, and they may have trouble competing for managed business travel now that their little protected island of happiness has been opened up to the world.

Previously, they had batted around the idea of starting transatlantic flights from the Continent to the US, but they've since decided against that plan for at least a few years. So, the one-trick pony is about to have some serious competition, and Sir Richard can't be happy about that.