IAG BMI
 

The final EC decision on the IAG & BMI takover due today at 1800 UK time.

merger cleared according to Bbc news

Latest from WPS:

Mergers: Commission approves acquisition of British Midlands (bmi) by IAG subject to conditions

Brussels, 30 March 2012 - The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the UK airline British Midlands Limited (bmi), by the International Consolidated Airlines Group (IAG), the holding company of British Airways and Iberia. The decision is conditional upon the release of 14 daily slot pairs at London Heathrow in order to facilitate new entry, and upon IAG's commitment to carry connecting passengers to feed the long-haul flights of competing airlines out of London Heathrow. In light of these commitments, the Commission concluded that the transaction would not raise competition concerns.

Commission Vice President in charge of competition policy Joaquín Almunia said: "The Commission could clear this transaction in the first phase given the commitments package offered by IAG which addresses the competition concerns we identified. The commitments package includes an appropriate number of very sought-after slots at London Heathrow as well as far-reaching feeder arrangements as regards connecting passengers. We are therefore satisfied that the competitive dynamics will be maintained so as to ensure choice and quality of air services for passengers."

The Commission’s investigation found that the transaction, as initially notified, would have led to high market shares and even monopolies on a number of domestic, European and international routes out of London Heathrow airport. The Commission also analysed whether there was a risk that IAG would prevent passengers from connecting on long-haul flights operated by competing airlines out of London Heathrow.

During the first-phase review, IAG submitted commitments to release 12 daily slot pairs at London Heathrow which could be used on the specific routes of concern, including the UK domestic routes, as well as on other European routes. In addition, two Heathrow daily slot pairs will be leased to Transaero for use on flights to Moscow. These slots and other incentives such as the acquisition of grandfathering rights after a certain period of time should facilitate new entry. Furthermore, IAG committed to entering into special agreements with competing airlines which operate long haul flights out of London Heathrow to provide these airlines with connecting passengers, including from UK domestic routes and other European routes. Passengers will therefore continue to have a choice to use other airlines than IAG when connecting at London Heathrow.

These commitments adequately address all competition concerns identified by the Commission. The Commission therefore concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or a substantial part of it.

The transaction was notified to the Commission on 10 February 2012.

Companies and products

The undertaking International Consolidated Airlines Group ("IAG" - United Kingdom) is the holding company of both BA and Iberia Líneas Aéreas de España, S.A. bmi is currently owned by Deutsche Lufthansa AG.

Both IAG and bmi provide air transport for passengers, air transport for cargo, airport ground handling services and maintenance, repair and overhaul services.

Merger control rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

A non-confidential version of today's decision will be available at:

Europa - European Commission - Competition - Mergers - Official Journal ... e=2_M_6447

Toothless :=

How much will it now cost to fly to those only served by BA...i guess there won't be many future sales :ugh:

What a joke. 14 slot pairs. The EU should be ashamed. I'm guessing lots of back handers have been involved. Sad day for British public.

Best outcome in my humble opinion.

I'm fairly certain Branson/Virgin would have raped BMI for their LHR slots and shut the airline down if they'd got their fingers on them.
LH would have just shut the airline down and sold the slots if the sale was blocked.

This way, BMI will most likely be absorbed into BA and fewer jobs will be lost.

Still, shame to see BMI go.

The next target is already in the sights!:E
And look out for a change of name on the BMI hangar it may not be BA!

gaspath, that is too cryptic for me. And I do the hard crosswords. :confused: Give us a clue?

To those wagging fingers above, how much competition on those routes would there have been if BMI had been allowed to go bust? err - the same as there will be now. :ugh:

Can we look forward to the startup of a shorthaul VS operation, say, LHR-ABZ as their boss seems so keen on competition?

Now, will all those parties who want to operate domestic routes into Heathrow please form an orderly queue.....

The name on the hangar? My money's on Lufthansa Technik.

Why would that be doug ? After all , who is lined up to handle LH engineering support at lhr ? the clue is in a teacup.....

Why?

If IAG had been required to give more than 14 slot pairs, they would have pulled out of the deal and Lufthansa would have allowed BMI to fold - to all intents and purposes tonight, with the associated job losses and all round grief, which has thankfully been avoided.

Yes, their slots may well have been distributed elsewhere but it would have resulted in IAG having a monopoly on a number of routes simply because no one else would or could fly them. As for SRB taking on some of the extra slots, he can't acquire new longhaul jets any quicker than anyone else so likely as not wouldn't be able to operate them anyway - and that's assuming he has the money, which I doubt. As always, lots of noise and not a lot else.

Was there ever any doubt if Lufthansa are involved ??

Let's see.....

You wanna buy Swiss ?? No problem....

You wanna buy Austrian ?? No problem...

You wanna buy Luxair ?? No problem....

You wanna buy BMI ?? No problem....

You wanna buy Germanwings ?? No problem....

You wanna buy SN Brussels ?? No problem....

Now you wanna sell BMI to IAG ?? No problem....

The only thing to wonder about is whether IAG would have been allowed to buy BMI if it had not already been owned by Lufthansa....

One World/ Star Alliance
 

These airlines are obviously key players in opposing alliances, does anyone know what kind of implications this will have on the acquisition?

That's a very good point Hussar 54, the Lufthansa peeps obviously have a lot of sway with the EU regulator, what a corrupt world.

Remember the EU Regulator ONLY had to consider where the sale might impact on competition. The hard reality that the public fail to recognise time and time again is that NO airline can make money operating domestic services out of LHR. Not BA, not bmi and most certainly not VS. RB will have to put his money where his mouth is now or forever hold is silence. The sale INCREASES competition at LHR to the far east. A little but significant point which most seem to miss.

If bmi had gone bust the slots would have been lost and there would have been a far bigger impact on competition between Scotland and Heathrow. Thank god it did not.

A sad day.

More like, we have you over a barrel, cough up..

Thought they were bound by contract to buy it, even if not wanted.

SCOTTIE & NUTLOOSE....

You're correct, of course....

Although the same EU ( totally unbiased, of course ) authorities seem to belive that there is adequate competition between Frankfurt and...oh, let's think....Zurich, Geneva, Vienna, Linz, Luxemburg, Brussels....And probably others that I can't think of just now, because slots at Frankfurt are just as difficult and expensive to acquire as at Heathrow....

I think the point that I was trying to make, but re-reading my post this afternoon, didn't make it as clear as I was thinking when I posted, is that I'm sure that Lufthansa's desire to sell BMI made it an awful lot easier for IAG to complete a deal rather than if IAG had wanted to buy BMI directly from Bishop a couple of years ago when Lufthansa first did the deal with him, as Lufthansa seem to have very good friends in much higher places inside the EU than just about any other European airline....

Do you want to be in a job ? do you want to them to be in a job ? You want one or the other:ugh: Tis peoples lives here Members:mad:

The deal for DLH to take control of BMI was done more than 10 years ago, and there were no competition issues with a German company buying a UK company. It is slightly different with a UK company buying a UK and the loss of competition on certain routes. The Scottish Government had valid concerns about the number of services from Heathrow to Scotland and the rise of fares where no competitor exists. Virgin's concerns were purely of self interest.

It should be remembered that Lufthansa did all they could to wriggle out of the deal with Bishop and took the case to the High Court, where they managed to reduce the final price from 450million to 340 million. SAS then forced them into buying their shareholding. All in all BMI has been a hugely expensive exercise for Lufthansa costing them over a Billion euros in 3 years. They just wanted out as quickly as possible and there was only one party that had the money and wherewithal to take on Mainline.

The human cost of this is that a very large number of people will be losing their jobs as BMI is integrated into BA. We still have no clear picture as to what is happening with Baby and Regional, maybe next week will bring some concrete information but I wont be holding my breath...

A few years ago - my apologies, I didn't realise that it is now ten years ago since the original deal....

And just to be clear - I'm genuinely glad and happy that BA's intervention will save jobs because like lots of us here, I've been on the receiving end myself in the past, and huge sympathies for those BMI people who don't get lucky....

Those who care to search through my profile will see my own concerns over Lufthansa's monopoly, and obvious lack of EU interest over these particular competition issues, have been regularly stated over the past three years or four years....

Virgin desperately need a short haul feeder so they can then market outside of the London area and into Europe.

If I was RB I would look at setting up a Low Cost(ish) A320 carrier out of LHR to Scotland and European Capital cities.

What are the implications of this now for Baby and BMI Regional?

Sorry fmcg but that's a real contradiction in terms, in fact the route to perdition.

YS

It would make more sense to operated the long haul out of AMS which already has excellent feeder services from regional airports and also has less slot restrictions than LHR.
A short haul feeder into LGW would be possible but expensive to set up and demand may be limited.

Regional & Baby to be brought into the bigger IAG deal (assume the Baby discount applies and that Regional is a freebie), neither to be integrated into BA at all, and then sold off or shut down. I guess that the unions and management will start the 90 consultation period very soon after the 20th of April.

Anyone know if Granite are still looking to buy?

Why? And what I mean by Low Cost I mean as a separate company with lower DOCs.

True but what they really need is a feed into LHR with bags checked in the whole way through.

Setting up in AMS opens up a small market for them, feeding into LHR opens up a massive market for them.

@Granite City Express.
Regarding Baby and Regional, do you know this or just your opinion????

Second hand news, from a management bod who had a briefing this morning.

GCE is correct. Baby and Regional are to be part of the deal with IAG. They will not be integrated into BA and will be sold off if possible.

I very much doubt whether Granite would buy Regional now. They've had virtually an 8 month run at it so far and haven't managed to raise the required capital to buy it and as we all know, buying it is one thing, having the cash to carry it on a completely different matter.

Hopefully there will be some others willing to purchase it.

As for Baby, I'm not sure that this changes anything, just that the seller is now IAG not Lufthansa. Hopefully the interested party is still interested.

OK, if you could explain how to lower the DOCs operating in and out of LHR I am sure that everyone would like to know. I should also be very curious as to why no one has done it already?

YS

LoCo at LHR
 

Also try turning an aircraft around in 25 minutes at LHR. You'd still be waitng for the bus(es) for your arrival pax let alone the departing Pax. What about those taxy times (on another thread). Why not have a stand alone terminal whilst we're about it. To be ready for THIS summer's rush.

I don't think so somehow.

S

Prediction time-

Granite to get funding, as there are some LHR slots needing an airline!

Based on no knowledge, but stranger things have happened.

Operating Emb 145's into LHR is commercial suicide. bmi have already proved that... So the reality of a small business being able to absorb those sort of losses just doesn't make sense to me.

I might be wrong, but unless Granite refleeted with bigger aircraft asap, then I don't see how they'd make it pay. I doubt whether Virgin would cover the cost for them.

Refleeting isn't exactly the cheapest thing in the world.

The accounting system and the way the regional aircraft were contracted in, have absolutely nothing to do with how a stand-alone operation would work in the future.

Those aircraft helped the bmi group to the losses that have been achieved more than they helped regional to a profit.

Operating 50 seat aircraft into Heathrow is a non-starter. You need a minimum of 100 seats and connecting services to make a service viable.

I understand that rumours of Granite's demise may be greatly exaggerated :ok:

What I mean by this is not the same model as EZY or FR. I have not made myself very clear.

For a start the short haul operation I would imagine should be a separate business with different contracts to mainline VS. They will need to operate from the same Terminal so as to be a proper feeder system.

Branson has wanted this for years and I would imagine that he will not give up. Buying the Scotland slots would be a very good start. Then from there expand the operation across Europe.

What other Longhaul based UK operator needs a feeder airline? VS is the only one!

You've got to remember that LHR, just like any other airport, is a shopping center with a few runways attached. The BAA do not want little aeroplanes in LHR. Look at an A380 next to an EMB 145 on the ground and you will see what I mean. They take up roughly the same 'space and time' on the airfield (within reason) but they have massive differences in terms of revenue for the airport operator. They have been trying for years to price small aeroplanes out of the airport. They even charge them all the same landing fees. You can't get enough people on a 'small' aeroplane and get enough from each seat after deduction of charges to make a profit. No one can and Virgin will not be able to either.

Getting BA to hand back slots to protect services to Scotland was a big mistake. A better outcome would have been to get BA to protect all the slots and maintain the same number of seats. As has been pointed out somewhere else if the slots don't get used they will probably go back to BA who will then have no obligation to operate the service. Either way BA are going to win.

Fly puppy - Spill the beans. What have you heard RE granite?

Mainly down to the egos of their founders but VS and Bmi missed a golden opportunity about 10 years ago to join forces to challenge BA. That chance is gone and there won't be another. Branson operating flights to the North is just hot air...there'll be pigs flying over LHR before a VS A320 to EDI...