BMI: ‘There will be redundancies’ says Walsh

British Airways parent International Airlines Group is expected to cut hundreds of jobs at BMI following its takeover of the loss-making carrier from Lufthansa.

The European Competition Commissioner gave IAG the go-ahead on Friday to buy BMI from Lufthansa in a £172-million deal. BMI employs about 2,500 staff.

IAG chief executive Willie Walsh said: “We have made no secret that there will be redundancies. Job losses are inevitable.” He added: “Lufthansa was considering shutting down the airline with the loss of all jobs. We will now engage with BMI and the unions as soon as possible.”

Walsh challenged Virgin Atlantic to step in to operate services between Scotland and Heathrow, referring to Sir Richard Branson’s recent claim that Virgin Atlantic could start operating regional services to Scotland.

IAG will surrender 14 BMI slot pairs at Heathrow as part of its agreement with the regulator, half of them for use on routes to Scotland.

Walsh said: “Now is the ideal opportunity for Branson’s Virgin to apply for those slots and fulfil the commitments they have made to Scottish politicians – to fly those short-haul services, even if it is something they have never done before.

“They have said they would start flights to Scotland. They now have the opportunity.” Walsh added: “It must be humiliating for Virgin to have to rely on the BA network to feed their traffic.”

Virgin Atlantic had itself offered to buy BMI from Lufthansa, but conceded it had made a lower bid. Sir Richard Branson has suggested an IAG takeover of BMI would mean less choice for passengers, fewer services and higher fares.

However, Competition Commissioner Joaquin Almunia decided that IAG’s guarantees “adequately address all competition issues”. Almunia said: “The commitments package includes an appropriate number of sought-after slots at Heathrow as well as far-reaching feeder arrangements as regards connecting passengers.

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

Seven of the 14 pairs of Heathrow slots IAG must relinquish must be sold to operators who will operate services to Edinburgh and Aberdeen. IAG must also allow rival carriers access to seats on services.

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