IAG receives approval for BMI purchase

The owner of British Airways, IAG, has received approval for the takeover of BMI from current owners Lufthansa. European authorities (EUROPEAN COMMISSION PRESS RELEASE HERE) cleared the deal after IAG agreed to give up landing slots at Heathrow airport.

Together IAG, which also owns Iberia, and BMI would have controlled 53% of landing slots at Britain’s biggest airport.

Virgin Atlantic had fought BMI's takeover by IAG, the owner of British Airways

Virgin urged regulators to block the deal saying that it distorts competition in the aviation market.  IAG reached a deal worth £172.5m ($273m) to buy BMI late last year.

The European Commission said its decision was conditional on the release of 14 slots at London’s Heathrow airport in order to allow other airlines greater access. It was also dependent on IAG committing to carry connecting passengers to feed the long-haul flights of competing airlines out of London Heathrow.

EU’s Competition Commissioner Joaquin Almunia said in a statement: “The commitments package includes an appropriate number of very sought-after slots at London Heathrow as well as far-reaching feeder arrangements as regards connecting passengers.

IAG’s chief executive Willie Walsh said: “This is great news for Britain. Over time we will launch new long-haul routes to key trading nations that are currently not served from Heathrow, while supporting our short-haul network.

“This is good for UK business and UK consumers. We have already announced that British Airways will re-start flights from Belfast to Heathrow, maintaining important economic links”…..

Full story from the BBC here…..

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BBC News
30 March 2012

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IAG to win EU approval to buy bmi airline – source (Reuters)

(Reuters) – British Airways owner IAG is set to win EU regulatory approval to acquire German group Lufthansa’s British unit bmi after offering to give up additional airport slots, a person familiar with the matter said on Thursday.

IAG had initially proposed to cede 10 slots for domestic and non-domestic routes. But it increased the number to 14 after rivals and other parties told the European Commission the concessions were not sufficient. It was not clear at which airports the 14 slots are located.

Antoine Colombani, a spokesman for the competition unit at the Commission, declined to comment on the case. Both IAG and Lufthansa also declined to comment.

The European Union executive was due to decide by Friday on the deal, which is worth 172.5 million pounds ($273 million)……

More from Reuters here…..

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By Foo Yun Chee
BRUSSELS | Thu Mar 29, 2012

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Iberia Express – IB’s new low-cost airline has inaugrual flight today

Iberia Group CEO Rafael Sanchez-Lozano pictured against the new logo

Iberia Express lanches today and will immediately become an affiliate member of the Oneworld alliance.

“This is a fundamental project for the Iberia group,” Chief Executive Rafael Sanchez-Lozano told reporters as he unveiled the new carrier, Iberia Express, ahead of Sunday’s inaugural flight from Madrid to Alicante.

“It will allow short- and medium-haul operations that are currently not profitable to become profitable, to make the group grow,” he said.

The group behind the venture is the International Airlines Group formed by the merger of Iberia and British Airways  in 2011.

“It is an absolutely necessary element of the group’s strategy,” he said……

Read the whole story at AFP…

IAG Group offers EU concessions to secure approval to buy BMI: Worldwide Business Review

[Worldwide Business Review] International Airlines Group has offered a limited number of extra concessions to try to secure regulatory approval for its acquisition of BMI British Midland, Lufthansa’s lossmaking UK subsidiary.

IAG offers to give up 14 slots for EU approval: Photo: Flickr-Ingy

IAG, parent of British Airways and Iberia, has sweetened its offer to the European Commission by increasing the number of valuable take-off and landing slots at London’s Heathrow airport that it would relinquish under the proposed deal from 10 to 14.

In a high-stakes move, Lufthansa and IAG are increasing the pressure on the Commission to grant a quick approval of the deal by warning that BMI could face closure if Brussels proceeds with an in-depth investigation of the transaction that could last months.

Joaquín Almunia, EU competition commissioner, must decide by March 30 whether to approve IAG’s purchase under Brussels’ phase one inquiry process. He is travelling to Washington early next week, adding pressure to the negotiations with IAG.

IAG, Lufthansa and the Commission declined to comment.

Lufthansa wants to offload BMI rapidly because it is heavily lossmaking. BMI reported an operating loss of €199m in the year to December 31, up from €145m in 2010. It blamed its UK subsidiary for pushing the German flag carrier to a €13m net loss in 2011.

IAG is keen to buy BMI because it would give the Anglo-Spanish group the chance to expand at capacity constrained Heathrow.

Virgin Atlantic, which failed with its bid for BMI, has been calling on regulators to block the IAG deal or extract big concessions on slots. Virgin has been highlighting the fact that BA, by combining with BMI, would become the sole provider of flights between Heathrow and Aberdeen, Basel, Edinburgh, Manchester and Nice.

By buying BMI for up to £172.5m in cash, IAG would increase its share of Heathrow slots from 44.8 per cent to …..

Read the full story at Worldwide Business Review…..

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24th March 2012
Worldwide Business Review – Nicosia

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