THE owners of British Airways has announced a deal to buy ailing airline BMI for £172.5m – amid fears that jobs go after the takeover.
There are also concerns that the takeover will unfairly strengthen BA’s position at Heathrow airport, with Sir Richard Branson announcing that his rival airline, Virgin Atlantic, would “fight this monopoly every step of the way”.
Under the binding agreement, BA’s owners, International Airline Group will acquire loss-making BMI, formerly British Midland Airways, from German carrier Lufthansa.
This will give IAG, which also owns Spanish airline Iberia, up to 56 additional and much-prized take-off and landing slots at Heathrow.
IAG chief executive Willie Walsh warned that there would be “some job losses” as a result of the deal, but added that it was too early to say how many posts would go.
However, he said the deal could create more jobs in the long-term if available short-haul slots were later used for long-haul services.
Mr Walsh dismissed talk of BA “over-dominance” at Heathrow, saying that the BMI acquisition would “enhance competition”.
He said BMI’s regional services and its low-cost airline, bmibaby were not part of the deal and that Lufthansa had the option to sell them before the IAG deal was completed.
BMI, which employs more than 3,600 staff and flies to Europe, Middle East and Africa and destinations in the UK, made a £153m pre-tax loss in the year to 2010.
Its regional arm offers short-haul flights from Aberdeen, Edinburgh, Glasgow, Leeds Bradford, Manchester and East Midlands, while bmibaby flies primarily out of East Midlands and Birmingham.
The deal will see IAG own 53% of the slots at Heathrow against Lufthansa’s 66% holding at Frankfurt airport and Air France/KLM’s 59% grip at Charles De Gaulle airport, Paris.
Sir Richard said: “Claiming that this deal is about new markets from Heathrow is a smoke-screen.
“We will fight this monopoly every step of the way as we think it is bad for the consumer, bad for the industry and bad for Britain.