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IAG keeps 42 pairs of slots at Heathrow out of the 56 acquired from bmi

BA’s parent company, IAG, has to give up 14 pairs of daily take-off and landing slots at Heathrow, in order for its take-over of bmi to be approved.  BA gains 56 pairs of slots per day, so without the 14, is gaining 42 pairs, which will be used to expand BA’s operations at Heathrow with new destinations and more schedules.  Seven of the relinquished Heathrow slots must be sold to operators providing flights to Edinburgh and Aberdeen. IAG must also provide competitors with access to seats on its UK and European services, allowing airlines such as Virgin to book journeys for passengers who wish to transfer on to its long-haul flights. Completion of the sale of bmi by Lufthansa is anticipated to take place around 20 April.  Walsh said IAG would operate bmi’s published schedule in the short-term but soon expand IAG’s long-haul network, announcing new destinations in Asia.



 

BA’s parent company to give-up Heathrow slots after bmi takeover

 

International Airlines Group (IAG) – the parent company of British Airways – will be forced to give up a number of take-off and landing slots from Heathrow, as part of the bmi takeover. Routes to Nice, Cairo, Moscow and Edinburgh will be affected.

On gaining EC approval for the deal, IAG chief executive Willie Walsh said it was “great news for Britain” and also for British business and consumers.

The takeover has been bitterly opposed by Sir Richard Branson’s airline, Virgin Atlantic, which has complained that the deal gives BA an over-strong presence at Heathrow.

http://www.itv.com/news/update/2012-04-12/bas-parent-company-to-give-up-heathrow-slots-after-bmi-takeover/


 

 

BA to gain additional 56 daily slots at Heathrow from bmi takeover

The acquisition of bmi mainline will give British Airways an additional 56 average
daily slots at Heathrow, of which up to 14 will be available to other carriers.
Retained slots will be used to expand BA’s operations at Heathrow with new destinations and more schedules.

Discussions with potential buyers for bmibaby and bmi Regional are continuing.

http://www.itv.com/news/update/2012-04-12/ba-to-gain-additional-56-daily-slots-at-heathrow-from-bmi-takeover/


 

Virgin eyes BMI slots for launch of UK flights

Virgin Atlantic is preparing to bid for the 12 pairs of Heathrow slots that will be freed up following British Airways’ takeover of bmi as Sir Richard Branson sets his sights on launching his first UK domestic flights.

Virgin, which currently holds 3% of Heathrow slots, has long hankered after a foothold in the UK domestic market.

By Nathalie Thomas (Telegraph)

8 Apr 2012

 

The airline is calling on the European Commission to ensure the 12 slots are auctioned as one complete package to provide the “most effective” competition to BA-owner International Airlines Group (IAG).

IAG will dominate 51% of Heathrow slots after the bmi deal completes on April 20, even though it agreed to relinquish 14 pairs of take-off and landing slots to satisfy European competition authorities. Of the 14 pairs, two are already leased to Russian airline Transaero, meaning only 12 would be available for use by a new entrant.

Virgin, which currently holds 3% of Heathrow slots, has long hankered after a foothold in the UK domestic market. It failed on several occasions to buy bmi.

Julie Southern, chief commercial officer at Virgin Atlantic, said the 12 slots relinquished by IAG were a “wholly inadequate” remedy to increasing competition on certain UK and European routes but the airline would nevertheless be among the bidders. The auction process is expected to commence in several weeks’ time.

Ms Southern told The Daily Telegraph: “We will apply to take up all of the remedy. We think it is important that the 12 pairs of slots stay together. It’s only by flying those all together that you get effective competition.”

The EC has split the 14 slots into three separate groups: seven pairs that have to be used between Heathrow and Scotland; the two Transaero slots; and five further daily slots with various destination restrictions.  The way the package was broken up has raised some concerns at Virgin that the EC is targeting more than one airline.

Virgin is expected to face stiff competition from Aer Lingus although the Irish carrier is understood to be “bi-laterally constrained” from operating some of the routes. A spokesman for Aer Lingus said: “Aer Lingus has made no secret of the fact that it wants to expand its presence at Heathrow.”

A successful bid would allow Virgin to connect UK customers to its long-haul network, which extends to 35 destinations worldwide. If successful, it is believed Virgin could start UK domestic flights from summer 2013.

Sir Richard has said he could still appeal the EC’s decision to wave through the IAG/bmi deal. A legal challenge is considered unlikely, however, given the cost implications. It also would not stop the bmi takeover from completing next week.

Ms Southern said the company would “have a look at an appeal” when the full details of the EC’s ruling are released. But she added: “Even if we do appeal, any appeal has no suspensory effect.”

http://www.telegraph.co.uk/finance/newsbysector/transport/9193152/Virgin-eyes-BMI-slots-for-launch-of-UK-flights.html

 

 


 

IAG’s chief celebrates bmi takeover with dig at Richard Branson

£172.5m acquisition by British Airways parent company consolidates airline’s leading position at Heathrow airport

by Gwyn Topham, transport correspondent  (Guardian)

IAG chief executive Willie Walsh celebrated his airline’s purchase of bmi on Friday by deriding his “humiliated” rival Richard Branson and challenging Virgin Atlantic to make good on its promises to provide short-haul services to Scotland.

Speaking after the deal was cleared by European competition authorities, Walsh said the news was great for Heathrow and Britain’s economy. The £172.5m acquisition by the British Airways parent company was approved after the airline agreed to relinquish 14 landing slot pairs at Heathrow.

The merger still gives the airline an extra 42 slots and consolidates its leading position at the UK’s biggest airport. Virgin, which had also hoped to buy bmi from its parent Lufthansa, had claimed the IAG takeover would inevitably mean less choice and diminished domestic services.

The European competition commissioner, Joaquín Almunia, said: “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. We are therefore satisfied that the competitive dynamics will be maintained so as to ensure choice and quality of air services for passengers.”

A delighted Walsh said IAG now had “the opportunity to really fulfil the potential we’ve always believed existed at Heathrow”. He said the extra slots would allow the airline to serve new destinations, make Heathrow a better hub and strengthen the UK economy.

He said the deal would “secure the maximum number of jobs” at bmi, although he conceded many of the 2,000-plus staff would go. But he said: “Lufthansa were seriously considering shutting down the airline with the loss of all jobs. We’ll engage now with bmi and their unions as soon as possible but inevitably there will be job losses.”

Seven of the relinquished Heathrow slots must be sold to operators providing flights to Edinburgh and Aberdeen.

Walsh challenged Virgin, which had warned that domestic services would be lost in a BA-bmi merger, to step in.  He said Branson’s airline, when still hoping to win bmi for itself, had pledged to Scottish politicians it would operate such flights. “I would expect Virgin to honour the commitments they have made. They have said they would start flights to Scotland. They now have the ideal opportunity.”

IAG must also provide competitors with access to seats on its UK and European services, allowing airlines such as Virgin to book journeys for passengers who wish to transfer on to its long-haul flights.  Walsh said: “It must be humiliating for Virgin and Branson to have to rely on the BA network to feed their traffic.

“It clearly demonstrates that the Virgin business model is not sustainable … they are reliant on their biggest rival’s network.”

Walsh said IAG would operate bmi’s published schedule in the short-term but soon expand IAG’s long-haul network, announcing new destinations in Asia.

On Thursday Branson had made a last-ditch appeal to the EU commission to scrutinise the deal further. However, Walsh said it had been a “very detailed” examination of competition concerns.

Ryanair also condemned the deal for what it called the “discriminatory” application of competition rules, complaining that it contrasted with the treatment of Ryanair’s 2006 offer for Aer Lingus. Ryanair boss Michael O’Leary said: “While we have no objection to BA’s acquisition of bmi, it will undoubtedly lead to higher fares and higher fuel surcharges … It also exposes again the commission’s discrimination against Ryanair in its 2006 prohibition of our offer for Aer Lingus, an airline which accounts for less than 1% of EU air travel.”

http://www.guardian.co.uk/business/2012/mar/30/iag-ba-takeover-bmi-branson

 


 

 

 

EC Approves BA Takeover Of BMI With Conditions

BMI PlaneThe cost of buying bmi is £172.5m in cash

 March 30, 2012  (Sky News )

The controversial takeover of UK airline bmi by British Airways’ parent company has been approved by the European Commission – but with conditions.

BA’s owners, International Consolidated Airlines Group (IAG), must give up 14 pairs of daily take-off and landing slots at Heathrow to boost competition in the sector, in return for Brussels’ agreement.

IAG must also commit to carry connecting passengers to feed the long-haul flights of competing airlines out of the west London airport.

If IAG agreed to the conditions, said the Commission, the takeover “would not raise competition concerns”.

Bmi is expected to be integrated into BA during the coming months

The cost of buying bmi remains £172.5m in cash, on a debt-free, cash-free basis, but this could be significantly reduced if Lufthansa, bmi’s current owner, decided not to include no-frills carrier bmibaby.

As part of the regulatory process, IAG offered seven daily slot pairs to be used between Heathrow and either Edinburgh and/or Aberdeen.

It also offered five daily slot pairs between Heathrow and Nice, Cairo, Riyadh, Moscow, Edinburgh and/or Aberdeen/

In addition, IAG offered to lease two Heathrow daily slot pairs to airline Transaero for flights to Moscow.

It said other airlines can apply for seats on the integrated BA/bmi short and mid-haul network for their transfer passengers, on normal commercial terms.

IAG chief executive Willie Walsh said: “We’re delighted the EC has given competition approval for our acquisition of bmi. Their decision follows a thorough review during which the views of key stakeholders have been taken into account.

“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.”

Last month Sir Richard Branson warned that if the takeover went ahead it would give BA an effective monopoly on some Scottish routes.

His Virgin Atlantic airline had formally complained about the plan to the Commission.

The aim is to complete the deal around April 20 with bmi being integrated into BA in the following months.