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The Lufthansa Group has reached “an agreement in principle” on the sale of Bmi to the International Airlines Group (IAG).
The sale to IAG, formed through the merger of BA and Iberia, is subject to a number of conditions, including regulatory clearances.
Under current plans confirmed by Bmi’s owner Lufthansa and IAG, a purchase agreement will be signed in the coming weeks and the sale complete in the first quarter of 2012.
However, Virgin Atlantic has released a statement saying that it has also made an offer for the loss-making carrier, and is “working with Lufthansa on the next stage of the purchase”.
The airline said: “We remain committed to the acquisition of BMI and believe that our offer will lead to the best outcome for the millions of consumers that fly in and out of Heathrow every year.”
Virgin warned that the purchase of Bmi by IAG would be anti-competitive.
“British Airways’ hold over Heathrow is already too dominant and we are very concerned – as the competition authorities should also be – that BA’s purchase of BMI would be disastrous for consumer choice and competition,” it said.
“With Government limiting growth at London Heathrow, they cannot afford to turn a blind eye to the deterioration of competition that would result from a BA purchase of BMI.
“If Virgin Atlantic completes the purchase of BMI, competition with British Airways would be strengthened, benefiting consumers with lower prices and a healthier market.”
The sale of Bmi to IAG is likely to mean a break-up of Bmi’s brands, with buyers for Bmi Regional having already been announced last month.