Gulf Cash Could Support Virgin BMI Buy

Virgin Atlantic's reported interest in acquiring BMI British Midland from Deutsche Lufthansa AG (LHA.XE) leaves open the question of how Virgin could fund such a deal.

As a private company, numbers for Virgin are hard to come by. But funding could depend on the appetite of Gulf investors, who are unlikely to stay on the sidelines of airline consolidation for long.

Of the two potential BMI bidders, British Airways PLC (BAY.LN) and Virgin Atlantic, the latter is the more likely. As RBS notes, funding is a constraint for both airlines. But with third-party investors' support, buying BMI - a short and medium-long haul airline with a sizeable number of takeoff slots at London's Heathrow airport - could become a reality for Virgin.