International Airlines Group plans to integrate Bmi into British Airways “as quickly as possible” if it gets clearance for the takeover from regulators.
The £172.5 million agreement for IAG to buy Bmi from Lufthansa is currently being looked at by European competition regulators and a decision could be made as early as March 16. Although the process could be delayed if the Office of Fair Trading in the UK decides to ask for permission to investigate the deal.
IAG chief executive Willie Walsh said that an agreement with pilots union BALPA would clear the way for BA and Bmi to be integrated as one airline which is expected to cost £100 million in restructuring.
Politicians in Scotland have voiced fears that the Bmi takeover by IAG will reduce services to Heathrow while Virgin Atlantic has urged the blocking of the deal. IAG has stated that it is committed to increasing flights from Scotland to Heathrow.
Walsh said: “We remain optimistic as we believe we have got a very strong case to allow the acquisition of Bmi to proceed. We have had some political resistance in Scotland which we are addressing. But it ‘s not an issue that will be determined by politicians, it will be determined by the competition regulator.
“We have taken the decision to integrate Bmi into BA. This follows an agreement reached with pilots represented by BALPA. Our intention is to move fast with this integration. It’s going to be challenging but it’s clear that the quicker we do it, the better it will be for everybody.”
IAG has only agreed to buy the main part of Bmi with Lufthansa attempting to sell both Bmi Regional and its no-frills subsidiary Bmibaby. Lufthansa has already reached a provisional agreement to sell Bmibaby to an unnamed UK-based company while BMI Regional is due to be sold to a group of UK investors known as Granite Aviation.
Walsh admitted IAG had already drawn up plans for what do with Bmibaby if it is not sold before the deal is completed.
“We do have plans in place if we end up acquiring Bmibaby that will form part of the same restructuring process,” added Walsh.
If IAG does acquire Bmibaby, then the price it pays to Lufthansa for Bmi will be reduced to offset the extra costs of restructuring the no-frills carrier.