Virgin Atlantic is to challenge a decision made by the European Union to allow British Airways owner International Airlines Group to take control of loss maker Bmi. Lufthansa recently agreed to hand Bmi over to IAG in a deal worth £172.5 million. The sale has angered rival airline Virgin Atlantic which claims that the takeover will seriously damage competition in the industry.
IAG is interested in the acquisition of Bmi because it will mean the group will be able to increase its dominance at Heathrow, Europe’s busiest hub. In a statement, Sir Richard Branson’s airline said it was concerned that the Commission had not fully appreciated the seriousness of the decision to allow the sale.
The statement said that competition at Heathrow would be harmed because British Airways will be handed almost complete domination at the hub which would mean an end of consumer choice. Virgin is also saying that the EU appears to have ignored the advice of business groups, politicians and other airlines.
IAG was created in 2011 after British Airways joined forces with Spanish flag carrier Iberia. Since then chief executive Willie Walsh has made no secret of the fact he is interested in consolidation through partnerships or takeovers.
Although Walsh said he would try to protect as many jobs as possible after the acquisition of Bmi, BA has admitted that there are likely to be around 1,200 redundancies.