We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedChange Management

British Airways owner, IAG, to buy Lufthansa's bmi


IAG, which also owns Spanish airline Iberia, beat Virgin Atlantic to the £175m deal for bmi

Article comments

IAG, owner of British Airways and Iberia, won the race to buy bmi, Lufthansa's UK arm, for £175 million, beating rival bidder Virgin to bag the coveted runway slots at Heathrow.

IAG will gain more than half the daily take-off and landing slots at Heathrow - Europe's busiest airport, which is operating at full capacity after plans to build a third runway were scrapped – if the deal goes ahead.

Virgin Atlantic, which tabled a competing offer earlier this month, said it would ask anti-trust regulators to block the deal, which is subject to regulatory approval, as it would stifle competition and push up prices.

"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," Virgin's Richard Branson said.

IAG currently holds 43.1 percent of the slots at Heathrow and would have around 52 percent of the hub's slots if its bid for bmi is approved by regulators.

The group said absorbing bmi's runway slots would give it the option of launching lucrative new long haul routes from Heathrow, and that it aimed to complete the deal by March.

Willie Walsh, IAG chief executive, said there would be "some job losses" as part of an effort to turn around ailing bmi, which last year racked up pretax losses of £153 million.

IAG shares were up 0.96 percent at 146.5 pence at 1030 GMT, in line with the FTSE Eurofirst 300 index of top European shares. Lufthansa was 1.9 percent higher.

Lufthansa has the option of selling bmi's 'bmi regional' and 'bmibaby' units before the deal completes, and IAG will pay a lower price if those business are not offloaded, IAG said

Under the deal, the German airline also holds onto bmi's staff pension liabilities.


Photo credit: Reuters

Share:

Recommended Articles

Comments

British Airways owner, IAG, to buy Lufthansa's bmi
Change Management

How new technologies are 'disrupting' shared services

How new technologies are 'disrupting' shared services

A whole new model with less staff, more focus on intellectual capabilities and localised staffing is evolvingmore ..


BHP Billiton names CFO Graham Kerr boss of new demerger business

BHP Billiton announced plans to separate its main business to simplify the group and boost shareholder valuemore ..

Online retailers to benefit from superfast broadband

Government hopes that 95 percent of the population will have superfast broadband by 2017more ..

UK factory outsourcing boosts spending to £130m

Value of deals up 132 percent in first half of 2014more ..

Car industry’s greatest challenge is the shift to software

BMW’s outage illustrates the minefield manufacturers are navigating in light of the connected carmore ..

Is the FTSE 350 hiding behind token women appointments?

There are just 16 female executives in the first five FTSE 100 companies and technology firms fare even worsemore ..

Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.



In Depth
Can finance rise to the challenge of major transformation?

Can finance rise to the challenge of major transformation?

Outdated finance processes, systems and competencies leave too many questions unanswered more ..

In Depth
Interim CFO or consultant? The pros and cons

Interim CFO or consultant? The pros and cons

Ed Harding offers an insight into the life of an interim CFO and the advantages in driving transformation more ..

Advertisement

* *