Virgin to challenge BMI takeover

Sir Richard Branson’s airline Virgin Atlantic has said it will appeal a European regulator’s decision to pass the owner of British Airways’ takeover of BMI.

Virgin Atlantic said the deal will “cause serious competitive harm at Heathrow” and will place British Airways owner International Airlines Group (IAG) in a position of “total market dominance”.

Branson, Virgin Atlantic president, said: “We will challenge every aspect of this process which, if allowed to stand, will undoubtedly damage the British airline industry for years to come.”

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The £172.5 million takeover was approved by the European Commission on the condition that IAG must give up 14 pairs of daily take-off and landing slots at Heathrow as a contribution to boost competition in the sector.

The deal is set to lead to up to 1,200 job losses at BMI’s head office at Castle Donington in Derbyshire and at regional airports, although BA said that without the acquisition, all 2,700 jobs at BMI could have been lost.

Branson said: “Competition regulation should protect the customer from monopoly situations where companies can set whatever prices they like and stop investing in their product. In these situations, the public suffers, the industry suffers and the country suffers.”

Virgin Atlantic will bid to operate all of the 12 remedy slots that BA has been forced to give up through the process, but said that alone is “completely inadequate” and called for more of BMI’s slots to be released.