Hundreds of jobs at risk as IAG admits it doesn’t want bmi’s low-cost business: Telegraph

[Telegraph] The future of bmibaby and bmi Regional is in doubt after International Airlines Group completed the takeover of parent company bmi but admitted it does not want the company’s low-cost and domestic businesses.

IAG has already warned that 1,200 jobs will be lost of part of the integration of bmi mainline, the long-haul division, into BA Photo: Alamy

IAG, the owner of British Airways, said on Friday that bmibaby and bmi Regional “will not be integrated” into the company and it “will pursue options to exit these businesses”.

Trade union Unite warned 800 jobs are at risk and urged IAG to seek a “viable buyer” for the businesses.

“BA must do everything possible to give these two businesses and the workforce a long-term future in the UK aviation industry,” said Oliver   Richardson, Unite national officer.

IAG has already warned that 1,200 jobs will be lost of part of the integration of bmi mainline, the long-haul division, into BA.

The company agreed a £172.5m deal with Lufthansa for bmi, but this included a sizeable discount in the event the German airline could not sell bmibaby and bmi Regional before the takeover was completed. Analysts believe the discount, which will be finalised in June, could be as much as £80m. IAG said the price reduction will offset the costs of operating and then exiting bmibaby and bmi Regional.

German company Intro Aviation and Dublin-based charter carrier ACL were linked with a bid for bmibaby, but a deal could not be struck.

Loss-making bmi is made up of three divisions – a traditional airline serving Europe, the Middle East and African, bmi regional, serving the UK, and low-cost unit bmibaby.

Read the full story at The Telegraph….

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By Graham Ruddick 
9:30PM BST 20 Apr 2012

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OFT halves BA’s record fine for price-fixing – Telegrapgh

[Telegraph] British Airways will pay just half the £121.5m fine it initially agreed to settle the long running Office of Fair Trading investigation into price fixing. 

British Airways will pay just half the £121.5m fine it initially agreed to settle the long running Office of Fair Trading investigation into price fixing

The reduced £58.5m fine comes after protracted negotiations between the airline and the OFT over allegations it colluded in price-fixing with Virgin Atlantic. Sir Richard Branson’s airline escaped punishment after blowing the whistle on the activity.

The reduced fine comes two years after a criminal case brought by theOFT against four former and current British Airways executives collapsed. It also follows a number of cases at the Competition Appeal Tribunal dramatically reduced fines handed by the OFT on separate cases.

Sources close to the OFT said the decision to reduce the fine from the figure agreed with BA in 2007 is a reflection of decisions taken by CAT and changed economic environment.

Ali Nikpay, OFT senior director of cartels and criminal enforcement, said: “The size of the fine underlines that it is important for companies to take steps to ensure that they have an effective compliance culture. The fine would have been higher still but for the co-operation provided by BA throughout the OFT’s investigation.

Without this, together with BA’s admission of the infringement, the case would have taken considerably longer to resolve.”

In 2007 British Airways was fined $300m (£187.4m) by the US Department of Justice over price-fixing of fuel surcharges with Virgin Atlantic between 2004 and 2006……

Read the full Telegraph story here….

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By Jonathan Russell
19 Apr 2012

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[Reuters] Several airlines interested in Portugal’s TAP sale – CEO

(Reuters) – Several international operators have expressed interest in the privatization of Portuguese airline TAP, its chief executive Fernando Pinto said on Tuesday, attracted by its fast-growing routes to South America and Africa.

"I cannot give names but what I can say is that the privatization is generating great interest," Pinto told journalists.

Portugal’s government has promised to privatize TAP, possibly this year, under the terms of a 78 billion euro ($102 billion) European Union/International Monetary Fund bailout.

International Airlines Group (IAG) (ICAG.L), formed by the merger of British Airways and Iberia, said in October it would look at TAP when the Portuguese government starts the formal sale process, its Brazilian routes being of particular interest.

“Besides IAG, others have shared with us their interest but, because they did so unofficially, we cannot name them,” the TAP CEO said.

“The main interest is the Lisbon hub, it was thanks to this geographical position that TAP has achieved everything”.

TAP’s slots at Lisbon airport provides access to Africa and both North and South America and have allowed the company, which covers around 75 routes in 34 countries, to become the leader in air travel between Europe and Brazil.

Pinto added that it will be up to the Portuguese government to decide if it wants to privatise the whole company or just part of it.

Read the full story at Reuters….

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By Sergio Goncalves
LISBON | Tue Apr 17

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Lufthansa Struggles to Dump BMIbaby to Complete IAG Deal: Bloomberg

Deutsche Lufthansa AG (LHA) is struggling to offload discount airline BMIbaby, potentially reducing proceeds from the sale of its entire U.K. business to British Airways parent IAG.

German turnaround specialist Intro Aviation GmbH, which had expressed an interest in BMIbaby, has ended talks

German turnaround specialist Intro Aviation GmbH, which had expressed an interest in BMIbaby, has ended talks, Managing Director Peter Oncken said in a e-mail. Charter carrier ACL has also dropped plans to make a bid, said a person familiar with the matter who declined to be identified discussing private talks.

IAG, or International Consolidated Airlines Group SA (IAG), agreed in December to pay 172.5 million pounds ($274 million) for BMI, while negotiating a “significant” discount should Lufthansa fail to find a home for the no-frills operation. The acquisition won European Union clearance on March 30, and London-based IAG is aiming to complete it by April 20.

“BMIbaby is not a very attractive asset,” said Joe Gill, an analyst at Bloxham Stockbrokers in Dublin, who follows low- cost carriers. “It’s getting flame-grilled at the moment because the market in northern England is incredibly competitive.”

BMI said March 5 that two parties were in the running to take over its discount arm, one of them an EU-based airline group operating in several countries, the other a U.K.-based company. Both parties aimed to keep BMI’s bases, it said, adding that a deal would be signed with one “in the next few weeks.”

“Lufthansa rejected a non-binding offer from us, rendering further discussions redundant,” Oncken, who founded Intro with German retail entrepreneur Hans Rudolf Wohrl, said in an e- emailed response to questions, adding that his company could resume talks with IAG after the takeover.

Like Intro, Dublin-based ACL signed an agreement allowing it to examine BMIbaby’s books, but isn’t currently considering an approach, according to the person familiar with its plans. Calls to the company weren’t returned.

BMI spokeswoman Katherine Hill said talks remain “ongoing” with potential buyers for BMIbaby, which has its main base at East Midlands airport between the English cities of Derby and Nottingham, reiterating comments from British Airways last week. Claudia Lange, a spokeswoman for the German company, referred all enquiries to BMI….

Read the full Bloomberg News story here….

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By Steve Rothwell and Alex Webb
Apr 17, 2012

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Sir Richard Branson has created his own turbulence at Virgin

Emergency landings aside, it’s not Gatwick but Heathrow that’s giving Sir   Richard Branson such a pain in his undercarriage.

The Virgin king's got all revved up over how air traffic control in Brussels has simply "waved through" the takeover of bmi by British Airways

The Virgin king’s got all revved up over how air traffic control in Brussels has simply “waved through” the takeover of bmi by British   Airways-owner International Airlines Group.

He’s spitting decibels that the deal lifts BA’s share of Heathrow’s take-off  and landing slots from 45pc to 51pc, dwarfing lil’ ol’ Virgin Atlantic’s   3pc.

True, IAG now has a big chunk of a congested airport. But Branson’s only got himself to blame for that. Over the past decade, he’s had enough flypasts at   bmi to stop what’s just happened. But he’s refused to put his money where   his mouth is.

Taxi back to 2003 and you find Branson in merger talks with bmi’s then owner Sir Michael Bishop (now Baron Glendonbrook). The idea was to put Virgin’s long-haul business together with the largely short-haul Bmi – the then owner   of 14pc of Heathrow slots – to create a proper competitor to BA.

Those talks barely got airborne before the pair decided that not only didn’t they trust each other’s accounts, they pretty much couldn’t stand the sight   of one another either. Undeterred, Branson was still banging on to this   newspaper four years later that: “It has to make sense for the two   companies to work together. All the employees of Virgin Atlantic and bmi  would love to see it happen.”

Although always hard to tell with Virgin, Branson should have had the cash to  deal, having already taken £600m out of his carrier by somehow cajoling   Singapore Airlines to stump up for a 49pc stake. That was an aviation deal   only rivalled in its chutzpah by Bishop, who skewered Lufthansa into paying   £223m in 2009 for his majority holding in the loss-making bmi.

Bishop’s sale presented Virgin with a fresh opportunity to grab bmi and its  slots. Indeed, Lufthansa gave Virgin first run at it – before the German   carrier got bored waiting for Branson to produce anything resembling the   readies, and turned to BA….

Read the full story at The Daiky Telegraph……

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By Alistair Osborne
16 Apr 2012

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British Airways and BMI deal puts 1,200 jobs at risk

British Airways owner IAG has said its deal to buy the BMI airline from Lufthansa for £172.5m could result in the loss of up to 1,200 jobs.

BMI employs more than 3,600 staff, but reported a £153m loss in the year to 2010 : Photo: Chris Ratcliffe/Bloomberg

The announcement came as BA began consultations with unions on plans to integrate BMI into its operations.

IAG, which also owns Spain’s Iberia, will gain 56 more slots at Heathrow airport as part of the deal.

The sale was announced in December and regulatory approval was granted by the European Commission on 30 March.

The deal is expected to take effect on 20 April, IAG said.

BMI employs more than 3,600 staff, but reported a £153m loss in the year to 2010.

Based in Castle Donington in Leicestershire, it operates flights to Europe, the Middle East and Africa.

It has 8.5% of the landing slots at Heathrow, the UK’s busiest airport….

Read the full story as it develops at BBC News…

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BBC News
12th April 2012

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No time to waste ! : BA start BMI Codeshare routes tomorrow (5th April)

Hot on the heels of the news last week, that EU Regulators had approved the sale of Lufthansa owned beleagured airline BMI to British Airways, new codesharing details have been released just today.

BA to start codesharing on selected BMI services tomorrow 5th April 12: Photo: Alamy

Starting tomorrow (5th April 2012), British Airways have announced that codesharing will start on selected BMI services.

Codeshare routes, originating from London Heathrow

• Yerevan, Armmenia
• Baku, Azerbaijan onwards to Bishkek, Kyrgyzstan & Tbilisi, Georgia
• Addis Ababa, Ethiopia
• Tbilisi, Georgia
• Almaty, Kazakhstan
• Freetown, Sierra Leone
• Beirut, Lebanon – Khartoum,

Codeshare flight number range is BA8050 – 8099, except those marked with ^ (BA7020 – 7029)
*BA is not offering codeshare service to Amman on bmi flight

Backround

Approval was granted by EU Regulators last week for the purchase of BMI by BA’s parent company IAG to proceed but conditions were inposed or offered. BA conceeded to teh sale of 14 Bmi slot pairs to it’s competitors. Completion of the deal is likely to conclude by 20th April.

Original route data from airlineroute.net

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Chris Newman
4th April 2012

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UK Air Passenger Duty rises by a massive 8% – Airlines urge review

Air passenger duty (APD) has risen by 8%, as announced by the government in the Autumn Statement last year.

For short-haul flights, the tax has increased from £12 to £13. For long-haul flights of more than 4,000 miles, it has gone up from £85 to £92. In light of the increase, airlines called on the Treasury to review the impact on “hard working families”.

A Treasury spokesperson said the majority of passengers will only pay an extra £1 as a result of the rise. Also as of 1 April, corporation tax in the UK falls by 1% to 24%.

Air passenger duty (APD) has risen by 8%

The changes in APD will also see it extended to private business jets for the first time.

In a joint statement the bosses of Easyjet, British Airways owner IAG, Ryanair and Virgin Atlantic said the increase would “hit millions of hard-working families and damage the wider economy”.

“We urge [Chancellor] George Osborne to make APD the first tax to be examined under the Treasury’s new review of the wider impacts of taxation on the economy,” they said. They added that further planned rises in the tax before 2016 would mean a family of four paying £500 in tax to fly economy class to Australia. In 2005, they said, the same family would have paid £80.

The business group the CBI has also called for a lower rise in APD. The government defended the rise by saying it had frozen APD last year.

“The majority of passengers will only pay an extra £1 as a result of the rise,” a Treasury spokesperson said…..

Read the full BBC News article here……

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BBC News correspondant
1 April 2012

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British Airways owner IAG considers buying stake in Japan Airlines (JAL)

International Airlines Group (IAG), is considering buying a stake in Japan   Airlines (JAL) amid expectations the Asian carrier will re-list on the Tokyo   stock exchange later this year.

Japan Airlines underwent a major re-structuring after receiving a state bail-out in early 2010 Photo: AFP

It is believed JAL, which de-listed in 2010 after it was forced to file for   bankruptcy protection, will seek to raise at least ¥500bn (£3.8bn), but   potentially as much as ¥1 trillion, through an initial public offering.

Willie Walsh, chief of executive of IAG, has long had his eye on JAL, a fellow   member of the Oneworld alliance, and last month announced a joint venture   between the two carriers on routes between Europe and Japan. IAG, which was born of the merger between British Airways and Iberia, said in   a statement: “JAL has done a great job in restructuring its business.   IAG would look closely at investing in JAL and wouldn’t rule it out at this   stage.”

The Japanese airline underwent a major re-structuring after receiving a state   bail-out in early 2010, which saw it cut routes and axe about a third of its   workforce.

It is believed other members of the Oneworld alliance group of carriers may   also seek to take a stake in JAL….

Full story from The Daily Telegraph here…..

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By Nathalie Thomas
29 Mar 2012

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British Airways eyes Asian routes after owner IAG given green light to buy bmi

International Airlines Group plans to use some of the 42 extra Heathrow slots gained from its takeover of bmi to increase British Airways’ exposure to Asia, after the deal was approved by the European Commission.

IAG agreed to give up 14 pairs of take-off and landing slots after buying bmi Photo: Alamy

The EC gave IAG, which owns BA and Iberia, the green light on Friday after the   aviation giant agreed to give up four more pairs of take-off and landing   slots than the 10 originally put on the negotiating table.

Among the 14 pairs of slots relinquished are seven that have to be used to   operate routes between Heathrow and Scotland.

The extra slots will be passed to a trustee appointed by the EC before being   auctioned off to rival carriers.

Virgin Atlantic, which challenged the £172.5m takeover, is expected to compete   for the Heathrow slots when they are eventually put on the market. Willie Walsh, chief executive of IAG, said talks will now commence with unions   over job losses at bmi, which currently has a workforce of 2,600

He said the deal would secure “the maximum number of jobs possible in the   company” but he warned: “I make no secret of the fact that there   will inevitably be some redundancies”.

Lufthansa had signalled it would shut loss-making bmi had the acquisition not   received EC approval.

IAG will operate bmi’s summer schedule but Mr Walsh said he then intends to   use the slots to expand BA’s long-haul network, including flights to parts   of Asia where the flagship carrier does not currently serve.

Friday night’s decision from the EC avoided the possibility of a lengthy “phase   two” investigation, although the takeover could still be delayed if Sir   Richard Branson’s Virgin decides to pursue an appeal. A spokesman for Virgin said: “We are very concerned that a deal of such   significance has been waved through with very little regard for the flying   public.

“The last-minute remedies offered this week by British Airways were not   shared with the industry and they have not been subject to a detailed assessment…..

Full story from The Telegraph here….

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By Nathalie Thomas
8:34PM BST 30 Mar 2012

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