David Prosser: BMI is the prize in the airlines' battle of Britain


Outlook: Willie Walsh, the boss of International Airlines Group, has never hidden his interest in BMI. But in a straight fight with Virgin Atlantic to take the airline off the hands of Lufthansa, my money would be on Sir Richard Branson's mob.

That is simply because Virgin needs BMI more than IAG does (it especially needs IAG not to get it). For while IAG would certainly love more slots at Heathrow, it is already dominant at Britain's hub airport. Virgin, by contrast, is desperate to play catch-up.

There are other factors in Virgin's favour too. BMI has a nasty pension deficit to deal with, which will worry Mr Walsh's Spanish partners at IAG. This time last year, the merger between British Airways and Iberia to create IAG was almost kyboshed by the former's pension problems. Then there's theargument that Lufthansa regardsVirgin as less of a threat than IAG. The latter is the leading light in the One World alliance, while Lufthansa is a key member of the Star alliance – its partners may not be keen to see it sell to IAG.