Well it seems Virgin was too late to the party with Deutsch Lufthansa AG deciding to sell it’s British Midland Airways subsidiary to … International Consolidated Airlines Group (IAG).
For IAG, the spoils of war are simple: 56 slots at Heathrow.
The cost has been revealed to be £172.5m, and IAG/Lufthansa aim to have the deal done in the next 3 months.
The deal of course is subject to competition bodies, which Virgin will bitch about non-stop.
Whilst BMI employ over 3,600 staff, they have managed to loose £153m in 2010, which means – another restructuring of the business. And sadly for some of the staff, it’s job cut time again.
Willie Walsh – IAG Chief Executive said:
“Given the scale of BMI’s losses, there is an urgent need to restructure the business.
“Unfortunately, this will mean some job losses but we will secure a significant number of high quality jobs here in the UK and create similar new jobs in the future.”
IAG will be conducting the changes over a 3 year period.
The sale currently includes BMI Baby, but Lufthansa has the option to dispose of BMI Baby before the sale of British Midland Airways is completed. BMI Regional is already sold in its current state. Should Lufthansa fail to sell BMI Baby before the deal is completed, IAG said the price it would pay would be subject to a “significant” reduction.
So where does this leave Virgin? Firing off an angry press release it didn’t get what it wanted
Sir Richard Branson states:
“BA is already dominant at Heathrow and their removal of BMI just tightens their stranglehold at the world’s busiest international airport.
“We will fight this monopoly every step of the way as we think it is bad for the consumer, bad for the industry and bad for Britain.”
I can only wish my best for the staff of BMI who are some of the best in the business in the air, and hope the losses that happen are minimal.
I’ll have further analysis on this during the day. But if you have a mileage pile, consider redeeming shortly….
