easyJet seeks to merge with Virgin SBHD: Low-cost operator easyJet seeks merger with rival Virgin Express to combat new threat from BA BYLN: By Stephanie Bentley

Budget airline easyJet is understood to be pushing for a merger with Richard Branson’s Virgin Express in a defensive move against BA’s rival low-cost airline. The scramble for alliances and consolidation has become increasingly frantic at the no-frills end of the airline market, following official confirmation on November 17 that BA will launch a low-cost operation, codenamed Blue Sky. Senior management from easyJet are understood to have met Richard Branson and his lawyer a day later. This was followed up with a meeting in Brussels between easyJet owner Stelios Haji-Ioannou and Virgin Express chief executive Jonathan Ornstein. Talks appear to have stalled over the cost of the deal, and over the issue of what to call a merged operation. One source says: “Nothing is done and dusted, but he [Stelios] is obviously very interested.” A Virgin Express spokesman admits talks have taken place and that the two companies have explored “co-operation”, but he denies that a merger is being discussed. The two organisations appear to complement each other both in their maverick, anti-BA stance. Because their routes are different, they may be able to avoid regulatory problems. The companies have different geographic centres – easyJet is based in Luton and Virgin Express is in Brussels. A merger would give easyJet a base on the Continent and more room for its planes, which now use the congested airport at Luton.