Presumably if BA were to take BMI, with BMI regional perhaps merged into flyBe together with the LGW-UK domestic shuttles, I would guess that MMC would want to see BA divest itself of its shareholding in flyBe.
Bearing in mind what size and shape flyBe would then have in the London market...
...if you consider the London market as a whole, surely a position of a strengthened BA built around a consolidated LHR hub, plus a strengthened regional flyBe operation (also with a London hub at LGW) in addition to the strength of easyJet in the London market must be sufficient to pacify the competition authorities.
Forgive me if wrong, but I can't think of any other EU state where three similar such significantly strong and independent competing airlines arranged around the key city exist.
Granted, it would be necessary to ensure that new entrants (once economy recovers) are not blocked from entering markets as a result of the size of the incumbents, in addition to which I am fully and painfully aware of the likely impact upon jobs of such consolidation; nevertheless from an overall strength and security point of view (and bearing in mind the significant airline consolidation elsewhere in Europe) might this perhaps not be the worst thing for the aviation industry in the UK?