Sir Richard Branson, chairman of Virgin Atlantic, is planning to thwart any British Airways bid for bmi, The Times has learnt.

Virgin is understood to have approached Sir Michael Bishop, the chairman and controlling shareholder of bmi, and expressed an interest, should he sell his stake.

Sir Richard tried to buy bmi four years ago and continues to believe that bmi would be a good fit with his own airline.

The Times reported yesterday that BA is considering buying bmi should Sir Michael decide to sell up.

Bmi insisted yesterday that the airline was not for sale, but industry sources have confirmed that he has spoken to several companies about a possible takeover.

Sir Richard said yesterday that a BA bid for bmi would be bad for passengers and lead to higher ticket prices.

He urged competition authorities to block such a bid, if it were to materialise. It is also understood that Virgin would seek to block BA by offering Sir Michael a more attractive deal.

Sir Richard said: “This combination of BA and bmi would damage the aviation industry, make BA even more dominant than it is and lead to higher fares for travellers. Virgin Atlantic has taken on issues like this before in order to protect consumers from high fares and lack of choice and we will not hesitate to fight such an anticompetitive merger in future.”

The deal to liberalise air travel between Europe and the US has put bmi in an attractive position. “Open skies” will allow any airline to operate from Heathrow to New York rather than the current four — Virgin, BA, American and United.

Bmi owns 13 per cent of Heathrow’s take-off and landing slots, which will become increasingly valuable as other airlines try to launch transatlantic routes from London. These slots will appeal to bidders such as private equity groups and Middle Eastern airlines.

However, Sir Michael has been with bmi since 1964 and is unlikely to sell his stake if he thinks the airline will be broken-up. He is thought to be sounding out interested parties to determine who would offer the best all-round deal. Analysts believe that bmi could fetch more than £1 billion.

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