Update: Uncertainty over 800 jobs as IAG acquires bmibaby and BMI Regional

UNCERTAINTY over the future of 800 jobs at low-fare carrier bmibaby and sister company BMI Regional continued today after the owner of British Airways completed its deal to buy BMI.

International Airlines Group (IAG), which owns BA and Iberia, will take on both on bmibaby and BMI Regional as part of its purchase agreement with German group Lufthansa but does not intend to keep the two businesses.

Lufthansa retained an option to sell bmi baby and BMI Region separately ahead of completion when it first struck the deal, but the task of determining the future of the two businesses will now pass to IAG.

This means that IAG will get an unspecified but “significant” reduction on the �172.5million purchase price originally agreed with Lufthansa.

Announcing the completion of its purchase of loss-making BMI today, IAG said it would run bmibaby and BMI Regional in the short-term while it looks at ways to exit the businesses.

Bmibaby’s routes include flights between Stansted and Belfast while BMI Regional services include links between Norwich and Aberdeen.

Unite union national officer Oliver Richardson said: “If BA is not committed to retaining BMI Regional and bmibaby and the 800 jobs which are at stake, it must find a viable buyer.

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“BA must do everything possible to give these two businesses and the workforce a long-term future in the UK aviation industry.”

The addition of the main BMI business will strengthen IAG’s position on long-haul routes out of Heathrow, with the deal angering Sir Richard Branson of rival Virgin Atlantic, who vowed to fight “this monopoly every step of the way”.

The deal was approved by the European Commission last month, although IAG must give up 14 pairs of daily take-off and landing slots at Heathrow as a contribution to boost competition in the sector.

It must also commit to carry connecting passengers to feed the long-haul flights of competing airlines out of London Heathrow.

Last week, IAG warned that the takeover of BMI was likely to lead to up to 1,200 job losses.

Positions facing the axe are at BMI’s head office at Castle Donington in Derbyshire and at regional airports, although IAG said that, without the acquisition, all 2,700 jobs at BMI, which is losing �3m a week, could have been lost.