Well it seems Virgin has finally found the guts to put it’s money where it’s mouth is, and has put a rival bid on the table for British Midlands Airways Ltd (also known as BMI, British Midland International) according to Bloomberg
Virgin Atlantic has been granted “due diligence” to create a bid that will trump International Airline Group’s (British Airways and Iberia) bid for the airline.
The prize with BMI is sadly not the staff, nor the aircraft, but the 8.5% of landing and take-off slots that BMI own at London Heathrow Airport. As we all know, getting slots at LHR is akin to finding hens teeth, so having a slice of the Heathrow pie like this would allow either carrier to grow as they pleased.
Lufthansa’s choice is simple: The Hard Cash of IAG, or giving Virgin a chance to defend, giving a strategic defence of Star Alliance via a 3rd party.
Virgin continues to moan about an anti-trust case against IAG if they are successful in bidding for BMI due to the amount of slots BA and Iberia operate out of LHR (operating 43% out of LHR).
Lufthansa meanwhile is aiming to offload BMI to a seller by Q1 2012 – least of all, Lufthansa would be happy to be rid of the money pit that BMI turned into.
Sadly, neither side can fight on price yet as the sale price of BMI has not been disclosed yet by Lufthansa. All Claudia Lange of Lufthansa has said is, both carriers stand an equal chance of success with their proposals.
Well, I’ll give the Virgin Group this: They’ve put their money where their mouth is – something I’ve wanted them to do from the beginning of the current round of takeover talks. Where the money is coming from for this bid – information is less than forthcoming.
Now the battle really commences…
Prospero says
The disposal of BD is getting interesting, whilst the demise of this friendly little airline is saddening.
One question though. Why the immediate assumption that a stronger *A presence at LHR is in Lufthansa’s (or United’s) best interests? Surely an empowered VS under the *A umbrella would chip away at their respective share of the market?