IAG's takeover of BMI prompts opposition

IAG's takeover of BMI prompts opposition

British Airways’ owner’s planned £172.5 million takeover of BMI has promoted opposition from rival Virgin Atlantic, unions and opposition MPs.

Fears over job losses and dominance by International Airlines Group carriers BA and Iberia at Heathrow have been voiced as major concerns.

Virgin Atlantic founder Sir Richard Branson pledged to “fight this monopoly every step of the way" after losing out in a bidding war to acquire BMI from owner Lufthansa.

The deal will see IAG own more than half of the take off and landing slots (53%) at Heathrow by adding 56. This compares with Lufthansa's 66% at Frankfurt airport and Air France/KLM's 59% at Paris Charles De Gaulle airport.

But Sir Richard said it “tightens their [IAG's] stranglehold at the world's busiest international airport”.

He added: “Claiming that this deal is about new markets from Heathrow is a smoke-screen. This deal simply cuts consumer choice and screws the travelling public.”

A Virgin Atlantic spokesman said: “If the acquisition is completed, it will tilt the competitive landscape dangerously towards BA and cast a shadow over the British travelling public.

“We will be asking the competition authorities to stop this deal and to protect the many millions of passengers on routes where BA and BMI currently compete.

“With Heathrow sewn up, BA can use its monopoly power to force up prices at the expense of the consumer.”

Announcing the deal yesterday, IAG chief executive Willie Walsh said: “Using the slot portfolio more efficiently provides the option to launch new long-haul routes to key trading nations while supporting our broad domestic and short-haul network.”

He admitted that jobs would have to go, saying: “Given the scale of BMI's losses, there is an urgent need to restructure the business.

“Unfortunately, this will mean some job losses but we will secure a significant number of high quality jobs here in the UK and create similar new jobs in the future.”

A spokesman for the Unite union said: “We will be looking to meet with IAG in the immediate future to press for guarantees on jobs and terms.”

Shadow transport secretary Maria Eagle said: “The competition concerns, highlighted by the sale of BMI, yet again demonstrate that the government is completely out of touch with the calls from business for a credible aviation policy.

“By refusing to even consider the need for additional capacity in south-east England, the pressure to use scarce slots to open up new long-haul routes will grow stronger and stronger, putting at risk vital internal UK connections. It's clear that this inaction by ministers is now putting jobs and growth at risk.”

She urged transport secretary Justine Greening “to accept our offer to work across the political divide on a long-term strategy for both aviation and high-speed rail as part of the plan for jobs and growth that the country needs”.

Eagle added: “Labour has accepted the government's decision to cancel the third runway at Heathrow, but ministers must now accept that their opposition to any other aviation growth in the South East makes no sense.”

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