‘Dark ages’ warning from Virgin over IAG BMI takeover

UK aviation faces “flying back to the dark ages” if British Airways’ parent IAG is allowed to take over Heathrow rival BMI.

The warning came today from Virgin Atlantic president Sir Richard Branson as the carrier submitted a formal complaint against the deal with the European Commission.

IAG agreed to buy BMI from Lufthansa for £172.5 million in December in the face of a rival bid by Virgin.

Sir Richard’s carrier claims approximately two million domestic passengers would face price increases if the IAG-BMI takeover is permitted.

It fears increased travel costs for some of the 750,000 small businesses served by the BMI network in the North West and Scotland – many of whom are reliant on affordable and accessible connections to Heathrow.

Virgin argues that three key domestic air links from Heathrow – to Aberdeen, Edinburgh and Manchester – would become BA monopoly routes. Competition would also be eradicated to some European destinations.

The airline’s submission claims this would give BA “the opportunity and the means” to hike fares and reduce flights on these routes.

BMI’s withdrawal of flights from Heathrow to Glasgow in early 2011 left BA as the sole operator, resulting in average rates increasing by 34%. The number of flights on the route dropped by nearly half because BA reduced its own flights on the route by almost 10%, Virgin argues.

IAG chief executive Willie Walsh has said that the BMI takeover would allow BA to launch more long-haul services from the London hub.

But Virgin’s submission to the Commission claims that BA would have a dominant position at Heathrow if the takeover is sanctioned.

Sir Richard said: “This takeover would take British flying back to the dark ages. For years pioneering airlines have fought to provide consumers with more choice and lower fares. This move will see British Airways unravel all of this progress made.

“When British Airways was left the only operator on the Glasgow to Heathrow route in 2011, fares paid by Scottish travellers rocketed by 34% in six months. That is not beneficial, that is backbreaking and plainly unfair.

“BA has a track record of dominating routes, forcing less flying and higher prices. BA is already operating on 60% of BMI’s routes so this move is clearly about knocking out the competition.”

He added that BA would control more than half of all take-off and landing slots at Heathrow – an airport that has had much needed growth plans forcibly frozen.

“The regulators cannot allow British Airways to sew up UK flying and squeeze the life out of the travelling public,” said Sir Richard. “It is vital that regulatory authorities, in the UK as well as in Europe, give this merger the fullest possible scrutiny and ensure it is stopped.”

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