Virgin Atlantic on Tuesday announced plans to operate three daily return flights between London and Manchester from next year, its first foray into the short-haul domestic market.

The airline, founded by billionaire entrepreneur Richard Branson, plans to fly from London’s Heathrow airport to Manchester airport in the north west of England from March 2013 – providing competition to rival British Airways’ short-haul service.

Virgin Atlantic claims BA, part of IAG, operates a monopoly on the Heathrow to Manchester route following its takeover of UK carrier bmi earlier this year.

“The airline is going to apply for all of the remedy slots being awarded by the European Commission following the IAG takeover of bmi, but is using some of its existing slots to service the Manchester to London route,” said Virgin Atlantic chief executive Steve Ridgway.

“The airline believes competition on this route has been neglected in the remedy process and aims to provide choice for the 650,000 passengers who travel between the two cities.”

The new route will be Virgin’s first move into domestic flying and will feed to its long haul services from Heathrow.

Irish carrier Aer Lingus is also expected to bid for the slots so it can offer services between the Scottish capital Edinburgh and Heathrow.

BA operates 17 return flights between London and Manchester – 13 of which are from Heathrow.