IAG takeover of bmi confirmed

Published Friday, 30 March 2012
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The controversial takeover of UK airline bmi by British Airways' parent company has been approved by the European Commission - but with conditions attached.

IAG takeover of bmi confirmed
A bmi plane comes in to land. (© Getty)

In return, BA's owners, International Consolidated Airlines Group (IAG), must give up 14 pairs of daily take-off and landing slots at Heathrow as a contribution to boost competition in the sector.

IAG must also commit to carry connecting passengers to feed the long-haul flights of competing airlines out of London Heathrow.

  • IAG has offered the following commitments to the EC as part of the regulatory process seven daily slot pairs to be used between Heathrow and either Edinburgh and/or Aberdeen
  • five daily slot pairs to be used between Heathrow and the following destinations - Nice, Cairo, Riyadh, Moscow, Edinburgh and/or Aberdeen
  • two Heathrow daily slot pairs will be leased to Transaero for use on flights to Moscow
  • other airlines can apply for seats on the integrated BA/bmi short and midhaul network for their transfer passengers, on normal commercial terms.

IAG chief executive Willie Walsh said: "We're delighted the EC has given competition approval for our acquisition of bmi.

"Their decision follows a thorough review during which the views of key stakeholders have been taken into account.

"This is great news for Britain. Over time we will launch new longhaul routes to key trading nations that are currently not served from Heathrow while supporting our shorthaul network."

He said the news was also good for UK business and UK consumers.

"We have already announced that British Airways will re-start flights from Belfast to Heathrow, maintaining important economic links.

"Expanding our longhaul network also helps Heathrow grow as an international hub airport despite its infrastructure constraints.

"This deal will maintain high quality jobs at bmi and create similar jobs when we expand."

With IAG's agreement to the conditions, said a Commission statement, the takeover "would not raise competition concerns."

Joaquin Almunia, European Commissioner for competition policy, said: "The commitments package includes an appropriate number of very sought-after slots at London Heathrow as well as far-reaching feeder arrangements as regards connecting passengers.

"We are therefore satisfied that the competitive dynamics will be maintained so as to ensure choice and quality of air services for passengers."

Completion of the deal is expected to take place around April 20.

Following this, it is understood that bmi mainline will be integrated into BA during the coming months.

Secretary of State for NI Owen Paterson welcomed the news.

"I have always been very concerned that our links into Heathrow should be kept up. Heathrow gives opportunities for global connections to and from Northern Ireland that are not available at the other London airports.

"Those connections are absolutely vital to our investment and trade."

Mr Paterson said the sale of bmi created "clear risks" to one of Northern Ireland's two services to Heathrow.

"I approached Willie Walsh about it and we have been in regular contact on the issue, he gave me assurances that, if IAG's bid succeeded, the Belfast service would be maintained.

"He repeated those assurances to me again yesterday. I am delighted with his announcement this evening confirming that the Belfast- Heathrow route is secure."

He added: "Part of building up the economy here is making Northern Ireland readily accessible to the world and linking in to the whole BA network will be a huge advantage.'

Low-fare Irish carrier Ryanair said the only significant EU airline merger that had been prohibited was its own merger with Irish airline Aer Lingus.

Ryanair boss Michael O'Leary added: "Today's rubber-stamping of BA's purchase of bmi shows yet again that the EC has one rule for Europe's flag-carriers, but different rules for Ryanair.

"While we have no objection to BA's acquisition of bmi, it will undoubtedly lead to higher fares and higher fuel surcharges, and give BA/IAG even greater control (over 55% of slots) at the heavily congested Heathrow."

© UTV News
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