This is all standard pre merger / takeover stuff. IAG needs to cover itself against the possibility that the EU unexpectedly either blocks the transaction or imposes sufficiently stringent conditions as to effectively block it. Furthermore any kind of co-operation at the moment between bmi and IAG may be viewed as being a cartel or a breach of competition rules - hardly welcome when competition authorities are watching all parties involved extra carefully at the moment. The obvious solution is for IAG to go out of its way to emphasise to staff the importance of treating bmi as a competitor. That way if someone from BA does something ill advised, IAG can say it wa just a rogue member of staff who will be sent for disciplinary action.
In the UK, while legally different entities, BA *is* IAG, and IAG *is* BA effectively. bmi is not big in Spain and while there might be the odd cabin crew with a Spanish spouse who wants to transfer to Madrid this will be an exception. If the transaction goes through bmi mainline flight operations and back office will be merged into BA. bmi as a legal entity may however survive for a lot longer. The costs of maintaining bmi as a separate brand are just too high to do anything else - there is little emotional attachment amongs the UK public to seeing bmi as the UK's sole national flag carrier, being bought up by evil forsigners unlike as might have happened with KLM, Swiss or Austrian - this will be more akin to American Airlines buying TWA - once the legal side had completsd the TWA logo disappeared quickly.
Suppose someone from BA gives a presentation entitled "What will happen if IAG buys bmi?" Substantially the same subject with the same content, everyone in IAG remains on message, and the lawyers and competition authorities are happy.
Last edited by davidjohnson6; 18th Feb 2012 at 15:36.