Airlines worldwide have been beset by problems, as pre-existing over-capacity was then exacerbated by the slump following the 11 September 2001 attacks, and finally by the Sars respiratory virus.

Now Virgin has acknowledged that it had even considered buying British Airways earlier this year, although it then decided working with BMI would be a better idea.

And to complicate matters further, the UK's Sunday newspapers are full of speculation that BA, conversely, is planning to take over Virgin instead.

Better pickings

Speaking to the Reuters news agency, a Virgin boardmember rejected the BA merger idea out of hand.

"Virgin Atlantic is not up for sale, and we've had no approaches from BA," said Virgin Group director Will Whitehorn.

As for the idea of buying BA, the group had brought in investment bank Credit Suisse First Boston to help with what it called "Project Balloon".

But in the end, Mr Whitehorn told Reuters, it made more sense to look elsewhere.

"BMI would have had no competition issues at all, and it would create a more interesting challenger," he said.