Virgin Atlantic may need to merge with a rival or join an airline alliance to survive in the increasingly competitive world of aviation, which has been changed by the advent of cross-border super carriers.

After falling behind in European consolidation following Air France's merger with Dutch-based KLM, Lufthansa's recent tie-ups and last year's BA-Iberia merger, Virgin needs a partner or else could be left behind.

The airline, formed in 1984 by British billionaire Richard Branson, who still owns a 51 percent stake through his Virgin Group, has attracted admiring glances from a number of rivals.

Singapore Airlines is looking to sell its 49 percent stake in Virgin, which has hired Deutsche Bank to conduct a strategic review that could lead to a whole or partial sale or to Virgin joining an airline alliance.

Here are some scenarios for how events could unfold:

TAKEOVER

Virgin could face a takeover approach, with industry analysts seeing a bid as most likely to come from a combination of Air France-KLM -- Europe's largest airline by revenue -- and US carrier Delta Air Lines, which has been working with Goldman Sachs to identify possible targets for several months.

Air France-KLM and Delta would be keen to get hold of Virgin's 288 takeoff and landing slots at London's Heathrow airport -- 3 percent of the airport's total -- to help them add more services to the United States and Asia from Europe's busiest hub.

Abu Dhabi's Etihad Airways has also expressed interest, though European Union (EU) rules state the region's carriers must be under European control, meaning any move for Virgin would have to involve an EU airline.

JOIN AN ALLIANCE

Virgin, the second-largest long-haul carrier at Heathrow, could also join a global alliance, a deal which would be attractive to Branson because it wouldn't end his control. It has a choice of the three: SkyTeam, Star Alliance and oneworld.

Air France and Delta's SkyTeam may be Virgin's most likely alliance as it does not have a UK partner and holds just 5 percent of the slots at Heathrow, compared with oneworld's 47 percent and Star Alliance's 25 percent.

Virgin, which has no agreements in place with oneworld or SkyTeam members, already has codeshare agreements with Star Alliance members, including Air China, bmi and US Airways. Star also includes Air New Zealand, Virgin's partner on trans-Tasman routes, and Singapore Airlines, its part owner.

Oneworld, which already has IAG-owned British Airways as a member, looks to be the least likely destination.

STAKE SALE

Virgin Group and Singapore are willing to sell at least part of their stakes, though Branson wants to retain an interest.

However, Singapore is keen to sell the entire stake it bought in 1999 for around GBP£600 million (USD$965.8 million), according to an aviation banker who wished to remain nameless.

"There's a book on it (Virgin Atlantic)... all (the stake) is worth is what they can sell it for because it's not making them any money," said the banker.

Ireland's Ryanair and Dubai's Emirates are also keen on buying a stake, according to UK press reports.

REVISIT LUFTHANSA DEAL

Another option for Virgin would be for it to get Lufthansa back to the table. Talks between the pair over the potential merger of Virgin with UK carrier bmi failed in 2009 with bmi being taken over by Lufthansa without Virgin's involvement.

A merger would have helped Virgin better compete with its main rival BA, allowing it to use bmi's short-haul network and slots at Heathrow to further international expansion.

Source: Reuters

The inflight broadband connectivity offered by Lufthansa has been very well received by customers. Since the launch of Lufthansa FlyNet in December, many passengers on longhaul flights to the United States have used the new service. “Email accessibility is immensely important, particularly for business travellers, but many leisure travellers are also taking advantage of the service,” says Christian Körfgen, Vice President Product Management and Innovation. “Meanwhile our surveys show that passengers are very interested in browsing the latest news on the Internet and accessing social networks.” Lufthansa is well on schedule and has already equipped 17 of its long-range aircraft with Lufthansa FlyNet, Körfgen explains. “Only two months after the introduction of this service, almost 20 per cent of our long-haul fleet is WiFi equipped.”

Through a hotspot, passengers have high-speed wireless access to the Internet via their laptop, iPad or smartphone. Thanks to the high bandwidth connection, e-mails – even with file attachments – can be sent and received without any time delay. Furthermore, FlyNet enables business travellers to connect to their corporate server via a Virtual Private Network (VPN). Data communication using the GSM and GPRS international cell phone standards will soon also be possible. In addition to WLAN, the communication options on board will then include cell phone text messaging and data transfer with smartphones such as the iPhone or BlackBerry. As before, however, passengers will not be permitted to use their mobiles phones to make calls.

Lufthansa offers the service in cooperation with its partners Panasonic Avionics Corporation and Deutsche Telekom. FlyNet is extremely easy to use. From any point in the aircraft cabin, passengers with a WLAN-enabled device can log on to the Internet in the same way as they would do at a public hotspot. After opening up their browser, they are automatically connected to the exclusive, free of charge Lufthansa FlyNet portal, which provides constant updates on business, political, sports and entertainment news. For Internet use various different billing options are available: passengers can pay by credit card or by redeeming Miles & More award miles. Alternatively, they can choose to be billed by Deutsche Telekom if that is their mobile service provider, or by an affiliated roaming partner. The one-hour flat rate is 10.95 euros or 3,500 miles; a 24-hour flat rate is available for 19.95 euros or 7,000 miles. Within the 24-hour period of validity, passengers can surf the Web on any connecting Lufthansa flight equipped with a hotspot or at a Lufthansa lounge after their flight.

Source: Lufthansa