Scottish agents say 'questions unanswered' on BMI deal

Scottish agents say 'questions unanswered' on BMI deal

The Scottish Passenger Agents Association (SPAA) issued a guarded welcome to the International Airlines Group takeover of BMI, but said “important questions remain unanswered”.

Other opponents of the deal that will put BMI in the hands of British Airways were more vocal. Leading Scottish businessman Brian Souter, head of the Stagecoach Group, said he was “staggered”.

The European Competition Commissioner gave the go-ahead to the £172 million takeover of BMI by BA parent IAG on Friday.

SPAA president Kevin Thom said: “A number of important questions remain to be answered.”

The deal will enhance BA’s dominant position at Heathrow, where the carrier will now have 51% of take-off and landing slots. Approval was granted after BA agreed to give up 14 BMI slot pairs, one quarter of the total, half of them serving routes between Heathrow and Scotland.

Thom said: “We welcome news of this commitment and the prospect that jobs will be saved. However, we await BA’s statement of commitment to its Glasgow-Heathrow service and we will be maintaining a close watch on the takeover as details emerge.”

He said the SPAA would seek assurances that “all our regional air routes will continue to prosper and grow.”

Thom added: “We urge IAG to retain as many BMI staff as possible. This is a huge opportunity for IAG and British Airways, but it brings huge responsibilities.”

Sir Brian Souter, chief executive of transport group Stagecoach, condemned the regulatory approval, saying he was “staggered” at the lack of a review by the UK Office of Fair Trading.

The OFT declined to seek a referral of the bid from the EC despite acknowledging a “significant level of concern, especially in Scotland”.

Souter described the IAG takeover as “the most fundamental change to the UK domestic air market for years” and accused BA of “predatory timetabling and pricing”.

Ryanair chief executive Michael O’Leary suggested the Commission had shown favouritism towards IAG.

O’Leary said: “We have no objection to BA’s acquisition of BMI, [though] it will undoubtedly lead to higher fares. It exposes the commission’s discrimination against Ryanair in its 2006 prohibition of our offer for Aer Lingus.”

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