British Airways owner IAG cleared to buy Lufthansa’s bmi

Monday, 2 April 2012 00:05 - - {{hitsCtrl.values.hits}}

BRUSSELS (Reuters): British Airways owner IAG secured EU regulatory approval on Friday to buy Lufthansa’s British regional airline bmi after offering to give up 14 daily runway slots at London’s Heathrow airport, Europe’s busiest airport.

IAG reached a deal worth 172.5 million pounds ($273 million) to buy its smaller loss-making rival late last year after trumping Virgin Atlantic Airways. Bmi’s main attraction is its holding of slots at Heathrow, where it is the second-biggest operator behind BA.

The European Commission said IAG’s concessions, which also included a pledge to carry connecting passengers to feed its rivals’ long-haul flights, were sufficient to address competition concerns.

“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,” EU Competition Commissioner Joaquin Almunia said in a statement.

“We are therefore satisfied that the competitive dynamics will be maintained so as to ensure choice and quality of air services for passengers,” he said.

IAG said the decision to clear the deal would be good for the UK economy.

“This is great news for Britain. Over time we will launch new long-haul routes to key trading nations that are currently not served from Heathrow while supporting our short-haul network. This is good for UK business and UK consumers,” IAG Chief Executive Willie Walsh said in a statement. Twelve slots ceded by IAG are for some UK domestic routes and other European routes. Two others will be leased to Transaero for flights to Moscow.

IAG currently has a 43.1 percent share of the take-off and landing slots at Heathrow. Together, IAG and bmi have a combined share of 53 percent of the airport’s slots.

Virgin has urged EU regulators to block the deal, saying it would distort competition in British aviation.