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* Virgin Atlantic looks to break up IAG dominance
* New routes depend on changes to slot rules
* Heathrow expansion faces legal challenge
(Adds detail, background)
By Alistair Smout
LONDON, Sept 18 (Reuters) - Virgin Atlantic said on
Wednesday it is hoping to add over 80 new routes to its network
after a third runway is built at London's Heathrow Airport to
challenge the dominance of British Airways owner IAG at
the airport.
Heathrow's expansion is scheduled for completion in 2026
after lawmakers voted strongly in favour of the third runway
last year, although environmentalists and local groups are
challenging the plans in court.
Virgin Atlantic said it could serve up to 84 new locations
from the expanded airport compared to its current 19.
The plans would depend on Britain changing how it allocates
slots to airlines. Currently Heathrow is dominated by IAG but
rules governing the allocation of slots are under review by the
government.
"Heathrow has been dominated by one airline group for far
too long," said Shai Weiss, chief executive at Virgin Atlantic.
"The third runway is a once in a lifetime opportunity to
change the status quo and create a second flag-carrier," he
added. "This would lower fares and give real choice to
passengers."
IAG holds more than 55% of take-off and landing slots at
Heathrow, with no other airline holding more than 5% of the
others, Virgin Atlantic says.
A spokeswoman for Britain's Department for Transport said
aviation markets must be competitive and work in the best
interests of passengers.
"We are exploring the best way to allocate landing slots,
ensuring they promote fair and competitive growth when
significant new capacity is released," she added.
Virgin Atlantic, part of Richard Branson's Virgin Group,
currently operates long-haul routes to destinations such as New
York, San Francisco, Johannesburg and Hong Kong.
It would like to add domestic routes such as Liverpool and
Edinburgh, short-haul flights to Germany, Spain and France as
well as long-haul flights to cities such as Jakarta and Panama
City.
Routes to Cape Town and Chicago, which it has ditched in
recent years, would be brought back under the expansion plans.
IAG said that Virgin could have increased its slot share at
Heathrow to 19.7% by buying slots but had chosen not to do so,
adding that Virgin also rented out slots it owns to other
airlines.
"IAG welcomes competition but the facts speak for
themselves. Virgin Atlantic's lack of Heathrow routes is down to
its own corporate strategy," it added in a statement.
Virgin Atlantic says the increase in overall route numbers
at an expanded Heathrow would help combine direct passengers
with connecting ones to make the old routes viable.
The boss of Heathrow has said he is confident the
construction of its new runway would go ahead despite new Prime
Minister Boris Johnson's long-standing opposition to the
expansion of Europe's biggest airport.
Johnson has said a court ruling in May in favour of
expansion was "not the end of the story" and that Heathrow had a
long way to go before it met the environmental standards
demanded by law.
Campaigners are appealing against the May High Court ruling,
but Heathrow, which is owned by Ferrovial, Qatar
Investment Authority and China Investment Corporation among
others, said the court appeal was accounted for in the airport's
timetable.
(Editing by Stephen Addison)
