Virgin Atlantic has hit back at efforts by British Airways owner International Airlines Group’s bid for BMI, claiming it also remains in the running to take over the loss-making Heathrow carrier.
Chief executive Steve Ridgway is to meet BMI owner Lufthansa bosses on Thursday, claiming that the battle to take over the airline is still alive. He told The Sunday Telegraph that Virgin Atlantic has been assured by Lufthansa that the sale process is far from sealed.
He said: “I guess BA is trying to put a gloss on it. But I don’t think they’re any further ahead than we are and they have a massive competition mountain to climb.
“There is no exclusivity and there is no binding deal. They have reached an agreement in principle. Both companies have put bids in and there’s a huge amount of work to do. We haven’t done formal due diligence yet; neither have they. That will start now.”
Ridgway warned that with Heathrow running at full capacity the BMI takeover posed major competition questions. He described the battle for BMI as being “the last chance to preserve significant and decent competition to British Airways”.
Ridgway was speaking in the wake of Friday’s announcement by IAG that it had an agreement in principle to take over BMI in a deal thought to be worth up to £300 million. This would increase BA’s holding of take-off and landing slots at Heathrow from 45% to 53%.
IAG chief executive Willie Walsh argued that Air France-KLM already controls 59% of slots at Paris Charles de Gaulle and 57% at Schiphol in Amsterdam.
But Ridgway pointed out that other European airports do not have the same capacity constraints at Heathrow, with both Frankfurt and Paris having four runways, two more than its London competitor.
Ridgway said: “British Airways on its own has more capacity and market share across the North Atlantic, which is still the world’s biggest market, than the whole of Skyteam in Paris or the Star team in Germany so they’re just comparing apples and pears.”