Lufthansa plans to sell BMI

[sn26567]

Virgin Atlantic, which tabled a rival offer for bmi earlier this month, said it would ask anti-trust regulators to block the deal as it would stifle competition and push up prices.

IAG said absorbing bmi's runway slots would allow it to launch lucrative new long-haul routes from Heathrow.

Chief Executive Willie Walsh said there would be "some job losses" as part of an effort to turn around ailing bmi.

[OO-ITR]

Does this mean that BRU will become more important as a Star hub since LHR will 'loose' BMI?

[cnc]

Does this mean that BRU will become more important as a Star hub since LHR will 'loose' BMI?

no

[diminbru]

Does this mean that BRU will become more important as a Star hub since LHR will 'loose' BMI?

no

elaborate!

[cnc]

Does this mean that BRU will become more important as a Star hub since LHR will 'loose' BMI?

no

elaborate!

There is not much to elaborate as i'm not saying its not possible but the BMI sale doesn't mean BRU will become more important. Besides you can hardly call LHR a star hub as most longhaul pax are transferred via FRA

[sn26567]

Richard Branson is not happy, and he is very vocal about it:

BA bmi deal bad for business & consumers

News that British Airways has agreed to purchase Lufthansa's bmi airways signals another titanic battle for Virgin Atlantic in the new year. Not satisfied with holding an overwhelmingly dominant position at London Heathrow - the busiest airport in the world – British Airways now wants to tilt the market even further in its favour by swallowing this major British carrier.

The proposed deal would see British Airways hold well over half of all landing slots at Heathrow and with BA already flying 60% of bmi's routes, the competition authorities should step in and stop the deal in its tracks. For instance, just one aspect of the deal results in the millions of customers from the north of England and Scotland that fly bmi to connect through Heathrow only having BA to choose from if this deal goes ahead – that cannot be right and will only screw the flying public. This deal is bad for the consumer, bad for business and bad for Britain.

It was like having a bleeding competition with a blood bank. British Airways were willing to pay anything for loss-making British Midland to stop Virgin competing on more of its routes. It's up to the competition authorities now to stop this extremely uncompetitive merger.

Following Virgin Atlantic's lead, we have already seen the UK’s Labour Party and Scottish National Party challenge the deal - fearing it will be terrible for customers and threaten hundreds of jobs.

Some of the British media clearly feel the same (here are Evening Standard and BBC Scotland articles on the deal).

We will fight this every step of the way and will keep you updated here throughout 2012.

By Richard Branson. Founder of Virgin Group. 23/12/2011

[Air Key West]

Read my post, today, in the thread "Lufthansa prepares for difficult 2012". LH CEO said on 27 October 2011 that no acquisitions are planned at present.

[sn26567]

International Airlines Group (IAG), the parent company of BA and Iberia, agreed in December to acquire BMI for £172.5m but that deal was subject to "significant reductions" should Lufthansa not succeed in first selling its bmi regional and bmibaby airlines.

Intro Aviation, a German turnaround specialist, has now emerged as an interested party in bmibaby. Intro Aviation has previously bought and turned around former British Airways unit Deutsche BA and Germany's LTU. There are several other interested parties and BMI are in the process of identifying the preferred buyer and aim to conclude a purchase agreement as soon as possible.

Regarding bmi Regional, BMI have concluded an agreement with a UK based investor group which is subject to certain pre-conditions which are to be fulfilled.

[Air Key West]

Thanks for the info. There is something which is not clear to me, so a question of clarification to all members on the forum who know these matters better than I do : why will LH get less than the intially agreed sum if they don't sell bmi regional and bmibaby ?

[cnc]

because acquiring BMR and BMI next to the wanted BMA will cost IAG money because they either have to look to sell or dismantel it. BMA alone might have a higher price but the overal cost will be lower for IAG.
airlines are not real real estate so bigger doesn't mean more valuable

[Boeing767copilot]

Lufthansa Seeks To Improve Earnings By At Least EUR1.5B By 2014

http://online.wsj.com/article/BT-CO-201 ... 05960.html

[sn26567]

British Airways should know by Friday 16 March whether owner IAG has gained approval with its bid for bmi, the Lufthansa-owned former British Midland Airways. The European Competition Commission has posted the date on its website.

[sn26567]

UK carrier BMI has signed a non-binding agreement with another potential buyer for its low-cost subsidiary BMIbaby, in addition to the deal signed earlier this year with an unnamed UK-based company.

BMI says that the latest suitor "has operations in several countries across Europe" and plans to acquire 100% of BMIbaby's shares.

It would take over the airline's fleet, route network and the continued employment of existing staff.

In January, BMI reached a similar deal with an unnamed company based in the UK.

More from Flight Global

[sn26567]

UK's Office of Fair Trading (OFT) passes BA-bmi takeover to the European Commission

In a classic civil service move OFT has decided not to review BA-owner International Airline Group's (IAG) deal to buy bmi from Lufthansa. It has passed the decision on to the European Commission. This will have further repercussions regarding the internal fitment of Heathrow T2, and also Lufthansa’s cash flow.

The Commission has until 16 March to decide, although the deadline may be extended.

Leading the opposition to the deal is Virgin Atlantic which would lose important regional links previously operated by bmi. It says that passengers could face higher fares and reduced services linking the North West, Scotland and Heathrow if British Airways succeeds in taking over rivals bmi, Virgin Atlantic has claimed.

Source: AERBT and http://www.oft.gov.uk

Meanwhile, the European Commission confirms IAG has offered concessions on proposed BA takeover of BMI but no details on scale have been made public.

The provisional deadline for the EC to make a decision on the takeover of bmi has also been put back to March 30 from the original date of March 16.

[sn26567]

Lufthansa may close BMI Regional if sale delayed

Deutsche Lufthansa AG may close its BMI Regional unit if the planned sale of the business is delayed by European regulators, the Sunday Times reported, citing people it didn’t identify.

Lufthansa’s intended sale of BMI to International Consolidated Airlines Group may be held up by a European competition investigation, the newspaper said.

Source: Bloomberg

Other sources say that the buyer of BMI Regional does not have sufficient funds to buy the business, another good reason for Lufthansa to close it.

[sn26567]

BA offers more concessions on bmi

British Airways’ parent company IAG has made a new set of concessions to the European Union to try to secure permission to buy bmi. IAG offered to make a range of concessions - or “remedies” as they are known within the EU – earlier this month to ensure its £172.5 million deal to buy Bmi from Lufthansa is cleared by competition authorities.

But IAG has now agreed to increase these remedies, which will be a number of landing and take-off slots at Heathrow, after the EU competition commissioner Joaquin Almunia said the original IAG proposal had received a “negative” response from “stakeholders”.

More from ABTN: http://www.abtn.co.uk/news/2817167-ba-p ... ssions-bmi

Branson makes last plea to stop bmi sale

Virgin Atlantic boss Richard Branson has made a final plea for the sale of Bmi to British Airways’ parent company to be blocked.

A decision by the European Commission on the deal is scheduled to be made on Friday with reports suggesting that it will be cleared after BA owner IAG offered to give up slots to ease competition fears.

But Branson has today written to Joaquin Almunia, Europe’s competition commissioner, to complain that the deal would “seriously distort” competition in the UK aviation market and that the concessions offered by IAG were “completely inadequate”.

More from ABTN: http://ht.ly/1ipUbb

[sn26567]

BREAKING: BA takeover of bmi set to be approved !

The Guardian: http://aggbot.com/UK-News-Feeds/article/16508346

BA has agreed to relinquish 14 prized landing slots to allay competition concerns, as it will occupy more than 50% of them at Heathrow airport, a remedy Branson said was "woefully inadequate".

[sn26567]

EU approves IAG purchase of Bmi

The EU Commission has approved the purchase of Bmi by the International Airlines Group (IAG), parent company of the merged British Airways and Iberia.

In a statement IAG said that "some technical conditions need to be finalised before completion, which is anticipated to take place around April 20, 2012". The group will gain an average of 42 daily slots at Heathrow as a result of the deal, excluding the following commitments to the European Commission as part of the regulatory process:
•Seven daily slot pairs to be used between Heathrow and either Edinburgh and/or Aberdeen
•Five daily slot pairs to be used between Heathrow and the following destinations - Nice, Cairo, Riyadh, Moscow, Edinburgh and/or Aberdeen
•Two Heathrow daily slot pairs will be leased to Transaero for use on flights to Moscow
•Other airlines can apply for seats on the integrated BA/bmi short and midhaul network for their transfer passengers, on normal commercial terms

The purchase price is £172.5 million as previously reported, but Walsh stressed that this is " subject to significant price reductions if Lufthansa does not opt to sell Bmibaby".

For more information visit flybmi.com, iairgroup.com, ba.com, iberia.com.

Source: Business Traveller

[Passenger]

Official press release EU :

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/338

[RoMax]

Asiana Airlines published a press release (in Korean only), announcing that BMI will end it's Star Alliance membership on 18 April 2012. It became a member on July 1, 2000.

After the EU approved the deal between LH and IAG, it's the plan to conclude the deal on 20 April 2012.

http://airlineroute.net/2012/04/04/bd-star/