BRITISH AIRWAYS’ PARENT company IAG has completed the purchase of Bmi from Lufthansa. IAG, which also owns Iberia, said that it now planned to integrate Bmi’s mainline operation into BA – the company announced it was looking to cut up to 1,200 jobs as part of this process. It was also confirmed that
the two subsidiaries, Bmi Regional and Bmibaby, were not sold before completion of the deal. This means that IAG will
buy both but there will be a “significant price reduction” on the original £172.5 million to be paid to Lufthansa. IAG said in a statement:
“As previously stated, Bmibaby and Bmi Regional are not part of IAG’s long- term plans and will not be integrated into British Airways. The costs associated with exiting these businesses, including the impact of operating them in the short term, are expected to be offset by the price reduction.”
Virgin Atlantic to appeal decision
6
VIRGIN ATLANTIC HAS decided to appeal against the European Commission’s decision to clear IAG’s purchase of Bmi. Virgin said British Airways’ parent IAG’s offer to give up 14 slots at Heathrow was “completely inadequate to address the damage which is being done by the deal”. The appeal did not stop the completion of the sale, so will be a retrospective process. Virgin Atlantic president Richard Branson said: “We will challenge every aspect of this process which, if allowed to stand, will undoubtedly damage the British airline industry for years to come.” Virgin confirmed that it would bid to operate 12 of the
available slots being given up by BA after the Bmi deal is completed – the other two slots are being leased to Russian airline Transaero.
EDINBURGH AIRPORT has been sold to Gatwick owner Global Infrastructure Partners (GIP) and will become the group’s third UK airport. Current owner BAA announced is was selling 100 per cent of Edinburgh to GIP for £807.2 million in a cash deal. GIP also owns Gatwick and London City airports. BAA has been forced to sell either Edinburgh or Glasgow airports by the Competition Commission and decided to off-load Edinburgh in October last year. The commission has also told BAA to sell Stansted, but the company is continuing to appeal against this decision. GIP chairman Adebayo Ogunlesi said: “Edinburgh airport is a high-quality infrastructure asset. We see significant opportunity to apply our tested and successful operational expertise and our knowledge of the global airports sector to develop and enhance the performance of Edinburgh airport in years to come.” The sale of Edinburgh is expected to be completed by the end
of May. The airport handled 9.3 million passengers in 2011 and generated EBITDA (earnings before interest, taxes, depreciation and amortisation) of £48.3 million for the same 12-month period. BAA continues to own Heathrow, Stansted, Southampton, Glasgow and Aberdeen.
IN BRIEF
■ ETIHAD AIRWAYS HAS BEGUN
FLIGHTS BETWEEN ABU DHABI AND BASRA in southern Iraq. The new A320 service operates four times a week, with 16 business class seats and 120 seats in economy. Basra marks Etihad’s third destination in Iraq, after Erbil and Baghdad. • Iraq feature, p50
TMCs
KEY TRAVEL SEALS £50 MILLION
UNIVERSITY DEAL
KEY TRAVEL has again been ranked first in the tender process to supply travel services to universities represented by five purchasing consortia across England, Wales and Scotland. As part of the new four-year agreement, universities can choose to use the TMC automatically to arrange trips without having to go through a competitive procurement process. Key expects the new contract will bring in £50 million over the next four years. Neil Robertson, contracts manager for the
Southern Universities Purchasing Consortium, said: “Key Travel obtained first position as a result of its high quality tender response.”
It’s simply not the case that London’s connectivity is falling off a cliff edge
Transport minister Theresa Villiers on UK airport capacity