International Consolidated Airlines Group SA (IAG) which owns British Airways (BA) and Iberia Airlines signed a deal to purchase British Midland International (BMI) for £172.5 million ($271 m) from its global rival Lufthansa. BMI has already cut 800 jobs and withdrew 10 planes in the last few years. The deal will cause another row of cuts as the company will be restructured as the company suffered from £153 million in losses. Currently, BMI employs 3,600 people and has 56 slots at Heathrow, the busiest airport of the world.
The acquisition which is claimed to be completed withing the next quarter, is being opposed by another British rival, Virgin Airlines. Virgin management argues the BA already covers the majority of the slots at Heathrow and addition of 56 more slots would constitute monopoly. In addition to IAG, Lufthansa had also been negotiating the deal with Virgin.
The purchase will be referred to the European Commission competition authority which will analyze the case.
