The corporate traveller

“Buying bmi’s mainline business gives IAG a unique opportunity to grow at Heathrow, one of our key hub airports” said Willie Walsh, IAG chief executive “Using the slot portfolio more efficiently provides the option to launch new longhaul routes to key trading nations while supporting our broad domestic and shorthaul network. This deal is good news for the UK as we will maintain a comprehensive domestic schedule including Belfast. Our plans to expand our longhaul network would guarantee growth by making Britain better able to compete on a global scale. It will also help maximise Heathrow’s position as a world class hub airport. 

“Customers will benefit from access to new destinations, more convenient schedules, enhanced frequent flyer benefits and greater investment than had been possible for loss-making bmi” continued Walsh. “Given the scale of bmi’s losses, there is an urgent need to restructure the business. Unfortunately, this will mean some job losses but we will secure a significant number of high quality jobs here in the UK and create similar new jobs in the future. IAG’s purchase of bmi will protect more British jobs than if the airline had been closed and had its Heathrow slots sold off. There will be restructuring costs spread over three years but these will be significantly lower in total than bmi’s current annual losses. bmi regional and bmibaby are not part of our plans and Lufthansa has the option to sell them before completion.” 

The transaction is scheduled for completion by the end of March 2012, subject to regulatory clearance from the European Commission and other bodies. 

In the meantime Virgin Atlantic has confirmed that it is no longer in talks with Lufthansa and has vowed to lobby, via the competition authorities, against the IAG deal.