Virgin Atlantic posts complaint over BA owner IAG’s deal to buy bmi
SOME fares could rise and some flights be cut if British Airways’ parent company is allowed to take over UK airline bmi, Virgin Atlantic boss Sir Richard Branson said today.
The proposed takeover by the International Airlines Group (IAG), which owns both BA and Spanish carrier Iberia, would “take British flying back to the dark ages”, Sir Richard added.
His comments came as Virgin submitted a formal complaint to the European Commission about the IAG-bmi proposal.
Virgin said if the merger was approved three key domestic routes to and from Heathrow would become BA “monopoly routes” – Aberdeen, Edinburgh and Manchester.
It added that competition would also be “eradicated to some popular European destinations” with BA having the opportunity and the means to “increase fares dramatically and reduce flights on these routes, backing passengers into a corner with no alternative carrier”.
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Virgin said about two million domestic passengers would face price increases.
Sir Richard, who is the airline’s president, said: “This takeover would take British flying back to the dark ages.
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“For years, pioneering airlines have fought to provide consumers with more choice and lower fares. This move will see BA unravel all of this progress made.”
He went on: “This merger will see BA holding more than half of all take-off and landing slots at the UK’s only major international hub, Heathrow – an airport that has had much needed growth plans forcibly frozen.
“The regulators cannot allow BA to sew up UK flying and squeeze the life out of the travelling public.”
IAG said today it was confident that regulatory authorities would approve the deal.
It said: “Bmi is a massively loss-making airline. Selling it to IAG offers the best solution for British consumers and UK plc, securing more jobs than if the airline was broken up and sold off for its Heathrow slots.
“This deal is the only option for safeguarding services to the UK regions. We’ve committed to keeping services from Belfast to Heathrow and increasing flights to Scotland. Far from cutting back, BA added 4,000 weekly seats on its services from Heathrow to Glasgow last year. Virgin Atlantic has never flown to Scotland and, as far as we know, has no plans to do so.
“In addition, BA directly employs nearly 1,000 people in Scotland and north east England and supports thousands more jobs and businesses indirectly.”
IAG said there was “healthy competition” at Heathrow, with more than 80 airlines operating there.
It added that IAG would have 53% of slots at Heathrow if it bought bmi, while the Lufthansa Group has 66% of slots at Frankfurt and Air France/KLM has 59% of slots at Paris Charles de Gaulle airport and 57% of slots at Amsterdam’s Schiphol airport.]
IAG announced in December that it had signed a binding agreement to acquire bmi from Germany airline Lufthansa in a deal valued at �172.5million.
The future of BMI’s regional division, which includes flights between Norwich and Aberdeen, and its low-cost arm Bmibaby, which includes services between Stansted and Belfast, remains uncertain, with Lufthansa retaining an option to sell the businesses before completion of the deal with IAG.
BMI, which employs more than 3,600 staff, made a �153million pre-tax loss in the year to 2010.