IAG beats Virgin to BMI
By John Reynolds, marketingmagazine.co.uk, Thursday, 22 December 2011 09:38AM
British Airways owner IAG has won out against Virgin Atlantic and has agreed to buy BMI from Lufthansa for £172.5m and could now sell off the airline's regional and low cost off-shoot brands.
Lufthansa had held talks with both IAG and Virgin Atlantic about a possible sale of the airline, which reported a £130m loss for the first nine months of the year and employs more than 3,500 staff.
IAG has not ruled out job cuts following its purchase of BMI, but said that restructuring costs would be spread over three years.
As part of the deal, it has the option of selling of BMI Baby, its low-cost brand, and its BMI Regional business.
Willie Walsh, IAG chief executive, said: "Buying BMI's mainline business gives IAG a unique opportunity to grow at Heathrow, one of our key hub airports. Using the slot portfolio more efficiently provides the option to launch new long-haul routes to key trading nations while supporting our broad domestic and short-haul network."
The deal, which includes BMI's highly prized runway slots at London's Heathrow airport, will be subject to clearance from competition bodies.
Sir Richard Branson, chairman of Virgin Group, said: "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."
Follow John Reynolds on Twitter @johnreynolds10
This article was first published on marketingmagazine.co.uk
- Brand Manager Ball & Hoolahan £38,000 + Car/Car Allowance, London (Greater), South East England
- Customer Activation Manager Ball & Hoolahan £40,000, London (Central), London (Greater)
- Global Marketing Manager Ball & Hoolahan £60,000 + c/a, South East England
- Senior Global Marketing Manager Ball & Hoolahan £70,000 + car or c/a, London (Greater)
- Social Media Manager Ball & Hoolahan £48,000, London (Central), London (Greater)
- ZenithOptimedia loses £200m O2 business to Havas Media without a pitch
- Doctor Who online game gets kids coding
- Philips launches juicer video campaign with Louis Smith
- Currys PC World launches brand campaign ahead of Christmas
- Argos releases second ad in its latest strategy
- A JWT tribute to its Oxo mum: Lynda Bellingham