IAG reaches “agreement in principle” to buy Bmi

The holding company for merged airlines British Airways and Iberia has reached an agreement in principle with Lufthansa for the sale of loss-making carrier Bmi. In a statement IAG said that “The sale and closing of the deal remain subject to conditions including a binding purchase agreement, further due diligence and regulatory clearances”, and added that it “envisaged that the purchase agreement will be signed in the coming weeks and the aim is for the transaction to be completed in the first quarter of 2012”. However Virgin Atlantic has also released a statement saying that it too has made a bid for Bmi, and says that it is “working with Lufthansa on the next stage of the purchase”. The carrier said it “remains committed to the acquisition of BMI and believe that our offer will lead to the best outcome for the millions of consumers that fly in and out of Heathrow every year”. Virgin also claimed that “British Airways’ hold over Heathrow is already too dominant  and we are very concerned - as the competition authorities should also be - that BA’s purchase of BMI would be disastrous for consumer choice and competition”. Today’s news follows last week’s announcement that Bmi is in “advanced discussion” to sell its Aberdeen-based subsidiary Bmi Regional to a UK-based investor (see online news October 28). For more information visit iairgroup.com. Report by Mark Caswell