Virgin Atlantic pounced on the chance to forge a tie-up with British airline bmi on Wednesday immediately after Lufthansa announced it was poised to become bmi's majority shareholder.

Virgin Atlantic chief executive Steve Ridgway said bmi would make a good fit with Virgin Atlantic and provide a stronger competitor to Heathrow kingpin British Airways.

"There is a very compelling opportunity for a combination. The two businesses are complementary," he said in an interview.

"We are a long-haul operator and they are predominantly a short-haul carrier. It would improve their performance and increase the competition we are providing in the market."

Ridgway was giving his first reaction to Wednesday's announcement by Lufthansa that bmi's founder Michael Bishop had exercised an option for it to take control of bmi by increasing its stake to 50 percent plus one share starting from January.

Virgin says it has 3 percent slots at Heathrow, London's main airport, while bmi has 12 percent and BA over 40 percent.

Bringing Virgin and bmi together would be good both for Lufthansa and its Star Alliance airlines grouping, he said, adding Bishop's "smart" deal left UK aviation at a crossroads.

"That is the opportunity and I think it could be a good example of how we can, and should, let consolidation happen where you can build better propositions and more vibrant and competing groups," Ridgway said.

Coupling Virgin with bmi would link airlines symbolised by savvy entrepreneurs, Virgin's owner Richard Branson and bmi's Bishop, seen as rivals but sharing a common antipathy toward BA. A deal could crown Virgin's 25th anniversary next June.

Ridgway declined to say whether Virgin Atlantic, which has long coveted a deal with independent-minded bmi, would seek to buy out Lufthansa or seek a three-way deal between them now that Lufthansa holds the cards. SAS owns 20 percent of bmi.

Virgin is 49-percent owned by Singapore Airlines.

While targeting bmi, Ridgway still opposed BA's plans to forge a broad alliance with American Airlines and Spain's Iberia.

"Don't let through consolidation that will be bad for consumers and UK aviation and Europe," he said.

Branson has promised to spend millions of dollars to fight the deal, which he says would stifle competition. BA says it needs to carry out the deal to compete under liberalization.

Ridgway was speaking on the sidelines of a Paris aviation conference as global airlines batten down the hatches for a recession coming on the back of a ruinous spike in oil prices.

More than two dozen carriers have gone bust this year.

Ridgway said passenger numbers on Virgin Atlantic planes had dipped in the past 3 weeks as the crisis worsened.

Virgin flies only long-haul routes and has a market share of about 22 percent on the fiercely contested Heathrow-New York JFK route, heavily used by the financial services industry.

"Right up until 3 weeks ago bookings were running slightly ahead year-on-year on flat capacity. They have fallen very slightly behind since then but are not calamitous and are still within shouting distance. But there's no doubt it is tough."

Global passenger traffic fell 2.9 percent in September in the first monthly decline in 5 years, IATA said last week.

Virgin's tour operator unit has been spared so far.

"We have very good forward booking for summer 2009 but that may be motivated people who are still comfortably off. The acid test will be the crucial January period for leisure travel."

Ridgway said he had no plans to defer or cancel aircraft purchases to shed capacity, having already agreed to push back the arrival of the delayed Airbus A380 superjumbo to 2013.

But he said he was "disappointed and annoyed" over delays to Boeing's 787, a USD$200 million lightweight mid-sized airliner designed to save fuel and fly long ranges.

He predicted the 15 planes ordered by Virgin would arrive 2 years late, instead of the 18 months Boeing is predicting.

Ridgway said there had been no movement yet in Virgin's bid to buy London's second airport Gatwick, but said it could be organized around the same group of 7 UK airlines that invested in NATS, the operator of Britain's air traffic control system.

The "Airline Group" consortium owning 42 percent of NATS includes Virgin, BA, bmi and low-cost airline easyJet.

Spanish-owned British airport operator BAA is selling Gatwick after being carpeted in an anti-trust report.