Virgin Atlantic has called for outright prohibition of the bid for BMI by British Airways’ parent International Airlines Group in its submission to the European Competition Commissioner.
In a substantial document opposing the IAG bid, Virgin Atlantic argues “Heathrow is the most severely slot constrained airport in the world” and the proposed transaction “unparalleled in the ultimate concentration to which it will give rise at a single airport”.
Virgin argues: “There are no appropriate remedies to negate the anti-competitive harm arising from the proposed transaction.” It says requiring BA to give up take-off and landing slots at Heathrow, where it would control 52% of the total, “would not be appropriate”.
IAG has agreed a £172-million takeover of BMI from Lufthansa, which has also announced a provisional agreement to sell budget division Bmibaby to an unnamed buyer.
The UK Office of Fair Trading must decide this week whether to seek a referral of the bid from Brussels, as it did in the case of the Thomas Cook retail merger with The Co-operative Travel last year.
Lufthansa is believed to want a deal signed off with minimum delay by the authorities.
Virgin Atlantic suggests its own counter bid for BMI “would give rise to virtually no anti-competitive concerns whatsoever”.
It dismisses IAG’s argument that major carriers at rival continental airports such as Paris Charles de Gaulle, Amsterdam Schiphol and Frankfurt control an even greater proportion of slots, and suggests any “potential efficiencies” from combining BA and BMI would be unlikely to be passed on to consumers.
Virgin Atlantic president Sir Richard Branson called last week for a block on the IAG bid, saying Virgin “can replace BMI’s challenge to BA by adding regional UK flying”.