BMI jobs at risk in British Airways deal
BMI jobs could be on the line as the owner of British Airways agrees to buy the troubled airline for £172.5m, in a move that will boost BA’s stranglehold on Heathrow.
International Airlines Group (IAG), which also owns Spanish carrier Iberia, will acquire up to 56 additional taking off and landing slots at Britain’s biggest airport once it acquires loss-making BMI from German operator Lufthansa.
Willie Walsh, IAG chief executive, warned BMI job losses were on the horizon as the new owner will restructure the business after the deal is completed. IAG hopes it will go through in the first three months of next year, subject to regulatory approval.
Elsewhere, Lufthansa has the option to sell its business units BMI Regional and low-fare carrier BMI Baby before completion – and the price will be reduced if Lufthansa does not opt to sell the latter.
Once completed, the deal will see IAG own more than half of the slots at Heathrow – 53 per cent – which compares with Lufthansa’s 66 per cent hold at Frankfurt airport and Air France KLM’s 59 per cent grip at Paris’s Charles De Gaulle airport.
The announcement will anger rivals such as Sir Richard Branson’s Virgin Atlantic, which also made a bid for BMI and has previously expressed concern over IAG’s dominant position at Heathrow.
This deal simply cuts consumer choice and screws the travelling public. Sir Richard Branson
Sir Richard said today: “This deal simply cuts consumer choice and screws the travelling public. BA is already dominant at Heathrow and their removal of BMI just tightens their stanglehold 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.”
However, Mr Walsh said the deal was “good news for the UK” and said customers would benefit from new destinations and more convenient schedules.
He said IAG would use its increased number of slots to launch new longhaul routes but would maintain the domestic network.
IAG could not confirm the number of potential job losses at BMI and added that it would secure a “significant number of high-quality jobs”.
The company also said the deal will protect more jobs than if BMI had been closed and the slots sold off.
BMI, which employs more than 3,600 staff and flies to Europe, Middle East and Africa and destinations within the UK, made a £153m pre-tax loss in the year to 2010.
BMI Regional offers shorthaul flights from Aberdeen, Edinburgh, Glasgow, Leeds Bradford, Manchester and East Midlands, while BMI Baby flies primarily out of East Midlands and Birmingham.