Virgin’s complaint over IAG bid

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Virgin Atlantic has made a formal complaint to the European Commission about IAG’s purchase of Lufthansa’s British unit bmi, saying competition on some European routes would diminish and that fares would increase.

Late last year, British Airways owner IAG agreed to buy bmi for £172.5m, seeing off rival bidder Virgin in the race to grab loss-making bmi’s coveted runway slots at London’s Heathrow airport.

In its submission Virgin Atlantic said that if the deal was approved, three key domestic routes – Aberdeen, Edinburgh and Manchester – to and from Heathrow would become a BA monopoly.

It added competition would be eradicated to some popular European destinations and that BA would have the opportunity and the means to increase fares and reduce flights on these routes.

“When BA was left the only operator on the Glasgow to Heathrow route in 2011, fares paid by Scottish travellers rocketed by 34 per cent in six months,” Virgin Atlantic president Richard Branson said.

“This deal will see BA holding more than half of take-off and landing slots at the UK’s only major international hub – an airport that has had much-needed growth plans forcibly frozen.”

The all-cash deal, which requires regulatory approval, would give IAG about 53 per cent of take-off and landing slots at Heathrow – Europe’s busiest airport – which is operating at capacity after plans to build a third runway were scrapped.

IAG currently holds 43.1 per cent of the slots at Heathrow. “Our planned purchase of bmi is being reviewed by the regulatory authorities and we’re confident they will approve the deal,” IAG said.