The owner of British Airways is buying BMI from Lufthansa – giving it control of more than half of Heathrow’s take-off slots.
The decision to make the acquisition by International Airlines Group (IAG) – which also owns Iberia – has angered rival Virgin Atlantic.
The sale will increase BA‘s hold on the take-off and landing slots at Heathrow airport, Britain’s busiest. Assuming the deal goes through, IAG will end up in control of more than half of the slots.
Sir Richard Branson’s Virgin, which also made a bid for BMI, said: “British Airways’ hold over Heathrow is already too dominant and we are very concerned, as the competition authorities should also be, that BA’s purchase of BMI would be disastrous for consumer choice and competition.”
IAG said the deal was still subject to a binding purchase agreement and regulatory clearance, but it envisaged a deal could be signed in early 2012.
The sale could lead to the disappearance of the low-fare carrier bmibaby, which was started by BMI in 2002. But Willie Walsh, head of IAG, said the deal was “fantastic” for passengers and the British economy.
IAG will concentrate on BMI’s long-haul routes from Heathrow. Bmibaby, which flies out of Belfast, Birmingham and East Midlands airports, is part of the deal. But there is already talk of “restructuring” the low-fare carrier.
Mick Rix, national officer of the GMB union, said: “The announcement that IAG is in talks with BMI is not a shock but as yet we don’t know the full details of these discussions.
“We have had talks with the chief executive of BMI in recent weeks and he has committed to sharing whatever outcomes of any proposed sale of further ownership of bmi with the unions.”
We will expand our networks, particularly on long-haul. Willie Walsh, IAG
Mr Walsh said: “We will expand our networks, particularly on long-haul, which is so critically important to the UK economy. The deal will allow us to connect further to the emerging world economies.”
Asked about jobs, he said: “It’s far too early for us to say what the impact will be.”
BMI, formerly British Midland, has an extensive long-haul network, which includes Africa, Asia and North America.