BA and Virgin in £300m fight over BMI

PA

British Airways and Virgin Atlantic are embroiled in a £300 million fight to buy rival BMI.

BA's owner, International Airline Group (IAG), yesterday announced it had reached an agreement with Lufthansa to buy the carrier, but Virgin responded by saying they too had made an offer.

The warring bids are fundamentally about gaining valuable landing slots at Heathrow.

If BA secure a deal, they would boost the number of their slots to 50%, leaving Virgin with just 3.1%.

Virgin also claim the IAG deal would be a 'disaster' for consumers and employees, with some unions also fearing that BA would scrap the budget carrier, bmibaby, causing huge job losses.

A Virgin spokesman told the Mirror: 'British Airways' hold over Heathrow is too dominant and we are concerned – as the competition authorities should also be – that BA's purchase of BMI would be disastrous for consumer choice and competition.'

In response, IAG argues that Lufthansa has two thirds of runway slots at Frankfurt Airport, and Air France has 59% at Charles de Gaulle in Paris.

BA boss Willie Walsh said the takeover would be 'fantastic' for passengers and the economy, while Virgin promised to 'protect and create hundreds more jobs' than the BA takeover.

Watch this space...

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