The purchase of BMI from Lufthansa by British Airways parent International Airlines Group was completed today.
IAG revealed that it would also be taking over Bmibaby and BMI’s regional arm in return for an unspecified “substantial price reduction” from the £172.5 million original purchase price.
IAG has no plans to retain the two BMI subsidiaries but will continue to operate them in the short term.
“Bmibaby and BMI regional have not been sold prior to completion. Under the terms of the purchase agreement, IAG will also acquire these businesses and receive a significant price reduction,” a statement said.
“As previously stated, Bmibaby and BMI regional are not part of IAG’s long term plans and will not be integrated into British Airways. IAG will pursue options to exit these businesses and more details will be provided in due course.
“The costs associated with exiting these businesses, including the impact of operating them in the short term, are expected to be offset by the price reduction.”
This morning’s announcement by IAG will come as a blow to rival Virgin Atlantic which earlier this week sought a last ditch appeal to the European Commission to overturn approval of the takeover.
BMI mainline operations are to be integrated into BA with consultations already underway with unions over 1,200 job losses. IAG is to update investors about the BMI integration plan at its first quarter financial results on May 11.
The European Commission ordered IAG to relinquish 14 pairs of take off and landing slots at Heathrow in order for the deal to be approved.