4/19/2012: IAG Completes Takeover of BMI

[In The News]

DALLAS – Today in Aviation, BMI-British Midland International Airways (BD) ownership was transferred to the International Airlines Group (IAG) in 2012.

BMI was purchased by Lufthansa (LH) for £223m in 2009. However, in the first nine months of 2011, the loss-making airline reported further operating losses of £133m. This led LH to put BMI up for sale in September 2011.

The deal did not include its low-cost (bmi baby) and regional (bmi regional) subsidiaries. (Photo: Rob Hodgkins, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons)

BA vs Virgin Atlantic

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Initially, long-time suitor Virgin Atlantic (VS) was believed to be the frontrunner to become the new owner.

Keen to protect British Airways’ monopoly at LHR, owner IAG announced in November that it too would be making an offer for bmi. This was confirmed on December 22, 2011 with a bid of £172.5m. The takeover would increase IAG’s take-off and landing slots at LHR from 45% to 53%.

Richard Branson vowed to fight the “anti-competitive” deal stating that BA’s purchase of bmi “would be disastrous for consumer choice and competition.” But BA’s then CEO Willie Walsh rejected these concerns, vowing that BA would use the slots for underserved routes to China, Korea, Vietnam and Indonesia.

G-MEDF, an Airbus A321, operated the airline’s last flight, – BD928. Photo: Alan Wilson, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons

Approval Granted

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The European Commission confirmed regulatory approval for the deal on March 30. Despite VS’s concerns, they stated that the takeover “would not significantly impede effective competition.” IAG was forced to give up control of 14 daily slot pairs at LHR “to facilitate new entry.”

They also demanded that IAG follow through with its commitment to carry connecting passengers to feed the long-haul flights of competing airlines out of LHR.

IAG completed the integration of bmi into British Airways (BA) by October 27, when the airline’s final flight touched down at LHR from Baku, Azerbaijan.

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Featured image: Airbus A319 (G-DBCI) went on to serve with BA until March 2018. Photo: Pieter van Marion from the Netherlands, CC BY-SA 2.0, via Wikimedia Commons

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