BMI Sold to IAG.

28/12/2011

International Airports Group (IAG) have entered into a binding deal with Lufthansa, the owners of BMI, to purchase the failing airline for £172.5 million.

The deal should be completed within the next three months, it is still subject to checks by various competition related committees, and Virgin Airlines, who had also been interested in purchasing BMI will be launching a campaign to stop it. In a statement, Richard Branson said: BA is already dominant at Heathrow and their removal of BMI just tightens their stranglehold at the world’s busiest international airport… 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.”

IAG also own British Airways, and will, if the deal goes through, have an effective monopoly of the take off and landing slots at Heathrow. Although this is not uncommon, Lufthansa has a dominant position at Berlin, as do many other European flagship carriers at their respective hub airports. It has been confirmed that should IAG take over BMI, there will be job losses. Willie Walsh, chairman of IAG said: “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”.

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