AIG’s acquisition of BMI cleared with conditions
By Sophie Mosca | Monday 02 April 2012
The European Commission cleared, on 30 March and subject to conditions, the proposed takeover of British Midlands Limited (BMI) by International Consolidated Airlines Group (IAG), the parent company of British Airways and Iberia. The €200 million transaction is conditional upon IAG’s commitment to offer 14 daily slots at London Heathrow Airport to facilitate new entrants. The decision also obliges IAG to carry connecting passengers to feed the long-haul flights of competing airlines out of Heathrow Airport. With these corrective measures, «the competitive dynamics will be maintained so as to ensure choice and quality of air services for passengers,» commented Competition Commissioner Joaquin Almunia.
The Commission’s investigation found that the transaction, as initially notified, would have led to high market shares and even monopolies on a number of domestic, European and international routes out of London Heathrow.
This acquisition is important for IAG’s development of its activities out of Heathrow, where BMI has highly sought-after slots. It will give IAG 51% of Heathrow’s slots, compared with the 53% initially foreseen. Half the slots relinquished concern routes to the Scottish cities of Edinburgh and/or Aberdeen and two daily slot pairs concern flights to Moscow for the Russian airline Transaero. The British airline Virgin Atlantic, which was opposed to the transaction, is not ruling out an action for annulment of the decision before the EU General Court.