Rival no-frills flights operators Virgin Express and EasyJet have held talks to agree a strategy to counter the arrival of a British Airways competitor.

The talks were reported in Thursday's Guardian newspaper as the first step towards a merger between the two companies.

But Virgin Express's Director of Corporate Affairs, Paul Skallon, said: "We are definitely not in merger negotiations with EasyJet nor do we intend to be."

He said the company, owned by Richard Branson, had held talks at the request of its Luton-based competitor.

"If somebody makes an approach to us our door's always open. We talk frequently to all the major airlines."

Mr Skallon added: "EasyJet is looking to do a deal with somebody."

But, he said, out of the 10 destinations Virgin Express would most like to start running flights to, none were at present covered by EasyJet.

"The only area of competition is that we operate the same sort of fleet and we are both in the low-cost market. It doesn't go much further than that," he added.

EasyJet was founded two years ago and has rapidly carved out a section of the market offering cheap flights between England and Scotland.

But it is yet to make a profit. And as it is not cradled within a large group such as Virgin, it has more reason to fear the entry of BA into the crowded market.

Its millionaire boss, Stelios Haji-Ioannou, has previously met Mr Branson but no agreement has followed.

Shortly after EasyJet began scheduling flights, Mr Haji-Ioannou also held talks with the BA Chief Executive, Bob Ayling. These too led nowhere.

Mr Ayling could now knock EasyJet out of the skies when BA's £50m Blue Sky service takes off from London's Stansted airport in March.

Given three years to prove its worth, Mr Ayling said the operation would be "extremely competitive".
 

Back to top | BBC News Home | BBC Homepage	©