The take over of British Midland Airways Ltd has taken another step closer today according to Office of Fair Trading
According to the statement:
The OFT today announced that it has decided not to make a request to the European Commission for a UK review of the proposed acquisition by International Airline Group (IAG) of bmi from Lufthansa.
The OFT will continue to work closely with the European Commission as it assesses whether the proposed transaction raises competition concerns for airline passengers including those travelling to/from airports in Scotland and the North West of England to London Heathrow as well as the overall competitive position at London Heathrow.
The OFT reached this decision following careful consideration and extensive dialogue with the European Commission. It has concluded that the European Commission would be best placed to consider the deal as:
- some of the issues (such as the impact of this acquisition on transfer traffic and on the overall competitive position at London Heathrow) require a comprehensive review of routes across many jurisdictions, not just the UK
- the European Commission has extensive expertise in handling airline merger cases and recent experience in merger and antitrust cases involving the merging parties
Sheldon Mills, Director of Mergers said:
‘The proposed acquisition of bmi by IAG has generated a significant level of concern in the UK especially in Scotland, the North West of England and Northern Ireland. We consider that the transaction should be subject to a careful and detailed review and we will continue to work closely with the European Commission to ensure that UK airline passengers will not lose out through the proposed deal.’
For IAG, it represents another step that it can push the merger through before the end of March. For Lufthansa, this means they can get the dead weight of British Midland Airways off its balance sheet.
Of course, this will not please Richard Branson of Virgin Group, who will now have to fight in the EU for Virgin’s corner. And subject to a few slots, it’s getting close to a “done deal” for the end of March.
There’s also news on the sale of BMI Baby – which I’ll be talking about later….