While this hurts British Airways, it's largely self-inflicted: Virgin will be taking the slots of the BA-owned bmi airlines, which has shrunk under its administration.
Sir Richard Branson’s Virgin Atlantic has been awarded short-haul routes between Heathrow and Scotland.
British Airways faces increased competition on its short haul routes after Virgin Atlantic was granted takeoff and landing slots to fly between London and Scotland, in a boost for Sir Richard Branson’s airline expansion plans.
The slots were previous used by Bmi, which was bought by International Airlines Group (IAG), the owner of British Airways and Iberia, at the end of last year.
“We have fought hard for the right to fly short haul and take a strong challenge to British Airways within these shores,” Steve Ridgway, Virgin Atlantic’s chief executive, said. “For 28 years both airlines have battled for customers all over the world and it has meant that British consumers have ultimately had some of the world’s best flying and lowest fares.
“Passengers can look forward to a great short haul service with us but most importantly reap the benefits from the re-injection of vital competition we can provide on these routes,” Mr Ridgway added.
A timetable is expected to be worked out within the next two weeks, with flights starting at the end of March next year.
Virgin Atlantic, which recently lost out to easyJet for the right to fly to Moscow from London, will focus on its flights between Scotland and London. Virgin plans to run “multiple” daily flights from Edinburgh and Aberdeen to London Heathrow. Virgin has already launched a new Heathrow to Manchester route next year.
The news is yet another blow to IAG, as British Airways merger with Iberia looks increasingly costly. The plan was to share operating costs between the airlines and reduce overheads, but the Spanish airline is losing so much money – about €1.7m (£1.4m) a day – it is almost wiping out the UK flag carrier’s profit.
IAG is forecasting a €120m operating loss across the group this year due to the problems in Spain. Operating losses at the Iberia division hit €262m in the first nine months of the year. A series of painful restructuring measures have been announced, including the axing of a quarter of Iberia’s workforce and slashing the group’s fleet of aircraft by a quarter.