The boss of British Airways’ owner IAG has cast doubt on the ability of the company to sell Bmi subsidiaries Bmibaby and Bmi Regional.
IAG completed the deal to buy Bmi from Lufthansa last week but will pay a lower price for the loss-making business after Lufthansa failed to sell Bmibaby and Bmi Regional before the purchase was finalised.
Willie Walsh, IAG’s chief executive, admitted yesterday that he was “not confident” about selling the two subsidiaries which IAG does not want to run and will not be integrated into BA.
"These are airlines that Lufthansa struggled to sell but we are going to make an effort to sell them,” added Walsh.
IAG previously said it would shut down both airlines if they could not be sold. But now it says that “all options” are being reviewed for them and it was “premature to talk about job implications”.
Bmi Regional employs around 330 people while Bmibaby has a staff of 470. BA has already announced plans to cut up to 1,200 jobs at Bmi’s mainline airline as it is integrated into BA’s operations.
Meanwhile Walsh again attacked the government over its policies on airport expansion and the recent increases in APD which were damaging the UK economy.
“Without question, investment is going to other parts of the world - I meet business people who are telling me that,” said Walsh as he opened Kingston Business School’s new £26 million home.
“They’re locating in places like Frankfurt instead of London. They would prefer to be here in London, but they’re saying the environment isn’t conducive to investment so we’ve got to recognise this as a key economic issue.
“Government policy is misguided and misplaced and needs to be urgently reviewed, or ten years from now we’re going to look back and say, ‘How did we lose all that?’”
He also criticised Heathrow’s immigration queues which were also putting off potential investors.
“I had dinner recently with a businessman who controls a $70 billion investment fund and he stood for more than two hours in a queue to get into Heathrow, and he said to me ‘I am not investing in this country if that’s what I am going to face every time I come here’,” added Walsh.