bmi takeover plan concerns raised

Feb 17 2012

Fears have been raised that a proposed takeover of the airline bmi could give one of its rivals a "monopoly" on some Scottish routes.

British Airways' parent company, International Airlines Group (IAG), wants to take over bmi.

Virgin Atlantic boss Sir Richard Branson has warned the move could "take British flying back to the dark ages".

Leading figures from the SNP and the Conservatives have also voiced concerns. Both Alyn Smith, an SNP MEP, and Conservative MSP Murdo Fraser fear if the takeover goes ahead, IAG will have a monopoly on flights between Heathrow and Edinburgh and Aberdeen.

That could mean travellers being forced to pay more for flights and possibly facing a reduced service. Scottish MEPs, including Mr Smith, have highlighted their concerns in a letter to European Competitions Commissioner Joaquin Almunia.

He warned: "If this move goes ahead, IAG would have a monopoly on the Edinburgh-Heathrow and Aberdeen-Heathrow routes: this could lead to reduction in service and increase in price."

Meanwhile, Mr Fraser said that if the deal went through, IAG's share of take-off and landing slots at Heathrow would rise from 45% to 53% "consolidating its position as the airport's most powerful carrier". He added that "the sale of BMI more generally will have implications for BMI Regional and the near 300 staff based in the north-east of Scotland".

Virgin has now submitted a formal complaint to the European Commission about the IAG-bmi proposal. It argued if the merger was approved three key domestic routes to and from Heathrow would become BA "monopoly routes" - Aberdeen, Edinburgh and Manchester.

Sir Richard, the airline's president, said: "This takeover would take British flying back to the dark ages. For years, pioneering airlines have fought to provide consumers with more choice and lower fares.The regulators cannot allow BA to sew up UK flying and squeeze the life out of the travelling public."

IAG said it was confident that regulatory authorities would approve the deal. It added: "Bmi is a massively loss-making airline. Selling it to IAG offers the best solution for British consumers and UK plc, securing more jobs than if the airline was broken up and sold off for its Heathrow slots. This deal is the only option for safeguarding services to the UK regions."