Virgin Atlantic Battles IAG in BMI Takeover
Virgin Atlantic has undermined recent claims by International Airlines Group (IAG) that its bid for the struggling airline BMI was close to being accepted, claiming that current owner Lufthansa has assured them the process is far from finalised.
Virgin Atlantic chief executive Steve Ridgway is due to meet with Lufthansa bosses this week to talk over the future of BMI, and said his company was very much still in the running to buy BMI from Lufthansa. Mr Ridgway added that BA appeared to be trying to gloss over the issues still to be faced in closing the deal.
"I don't think they’re any further ahead than we are and they have a massive competition mountain to climb," said Mr Ridgway. "There is no exclusivity and there is no binding deal. They have reached an agreement in principle. Both companies have put bids in and there’s a huge amount of work to do. We haven’t done formal due diligence yet; neither have they. That will start now."
Mr Ridgway also highlighted that should IAG secure a deal to buy BMI, the issue of competition would need to be raised to ensure healthy competition at Heathrow. He said that the race to buy out BMI, with its share of take-off and landing slots, was "the last chance to preserve significant and decent competition to British Airways" at Heathrow. If the IAG bid for IAG were to go through, BA's share of slots at the airport would grow from 45 per cent to 53 per cent.
While IAG boss Willie Walsh argued that Air France-KLM controlled an even greater proportion of slots at Paris and Amsterdam airports (59 and 57 per cent respectively), the Heathrow situation was different due to the capacity constraints of having only two runways.
Travel Industry news posted by Jan Moys on 07 November 2011
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