British Midland Ltd (BMI) has been put up for sale and International Airlines Group (IAG), owner of BA, has made its intention to make a bid clear.
BMI owners Deutsche Lufthansa AG (Lufthansa) have “researched an agreement” with IAG, which is aiming to complete the transaction in the first quarter of 2012.
IAG has also stated its intention to target booming Asian destinations from London Heathrow. Willie Walsh, IAG Chief Executive, outlined that the decision was made because of the potential for growth.
Speaking to the Guardian, Walsh said: “We don’t fly to places like Korea, Indonesia, and Vietnam. There are a lot of destinations in Asia that are booming. The potential growth in Asia is way in excess of anything we will see around Europe.”
The news comes as the Transport Secretary, Justine Greening, confirmed that a third runway will not be built at Heathrow, stifling any plans to expand the airport.
BA rivals Virgin Atlantic had also lodged a bid for BMI and have since claimed that the deal was anti-competitive from the outset. The airline said: “British Airways’ hold over Heathrow is already too dominant and we are very concerned – as the competition authorities should also be – that BA’s purchase of BMI would be disastrous for consumer choice and competition.
“With the government limiting growth at London Heathrow, they cannot afford to turn a blind eye to the deterioration of competition that would result.”
BMI currently flies from airports such as London Heathrow, Manchester, Aberdeen and Edinburgh to destinations across Europe, the Middle East, Central Asia and Africa. If the move by IAG is approved, then there is a possibility the routes will be given a shake-up and there may be a reduction in flights from regional airports.
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