IAG 'sweetens' BMI offer to speed up deal

IAG 'sweetens' BMI offer to speed up deal

International Airlines Group has reportedly increased the number of Heathrow slots it is prepared to give up in order to secure the takeover of BMI from Lufthansa.

Reports this morning suggested the British Airways and Iberia parent has sweetened its offer to the European Commission by raising the number of valuable take off and landing slots it would hand over from 10 to 14.

Lufthansa and IAG are increasing the pressure on the commission to grant a quick approval of the deal by warning that BMI could face closure if Brussels proceeds with an in-depth investigation of the transaction that could last months.

EU competition commissioner Joaquín Almunia must decide by March 30 whether to approve IAG’s takeover under Brussels’ phase one inquiry process.

IAG would increase its share of Heathrow slots from 44.8% to 53.5% by acquiring BMI for £172.5 million.

The BA parent would secure 56 pairs of daily slots held by BMI in the deal. It initially proposed relinquishing 10 pairs of slots to secure approval, believed to cover routes to Aberdeen, Cairo, Edinburgh and Riyadh.

But the commission said the concessions were unlikely to be adequate.

Giving up any more than the 14 pairs of slots IAG is now proposing risked undermining the case for buying BMI, given that it was lossmaking, the Financial Times reported, quoting a source "familiar with the group".

Failed BMI bidder Virgin Atlantic has been calling on regulators to block the IAG deal or extract big concessions on slots.


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