News

IAG completes Bmi purchase

20 Apr 2012 by BusinessTraveller

International Airlines Group (IAG) has completed the purchase of Bmi from Lufthansa, but will receive a “significant price reduction” on the original agreement of £172.5 million, as the German carrier was unable to offload subsidiaries Bmi Regional and Bmibaby prior to completion.

Lufthansa had been in talks with at least one UK-based company to sell both of the subsidiaries, and had signed non-binding terms for the potential sale of Bmibaby back in February (see online news February 2).

But these talks have not come to fruition, so under the terms of the purchase agreement IAG will also acquire these businesses, and receive a significant price reduction as a result.

IAG reiterated that “Bmibaby and Bmi Regional are not part of IAG’s long term plans and will not be integrated into British Airways”. In a statement the group said:

“IAG will pursue options to exit these businesses and more details will be provided in due course. The costs associated with exiting these businesses, including the impact of operating them in the short term, are expected to be offset by the price reduction.”

Earlier this month IAG opened consultations with unions over the integration of Bmi into BA’s operations at Heathrow (see online news April 12), and said that the deal could result in up to 1,200 job losses.

As of today (April 20), Bmi flights are now available for purchase on the BA website, and the carrier says “We’re already looking at options for exciting new destinations, particularly in Asia and we’re hoping to announce a new route soon.”

Bmi has also announced details of what Diamond Club members will be offered within the BA Executive Club scheme, including status match and 1:1 miles conversion – for more details click here.

For more information visit iairgroup.com, flybmi.com, lufthansa.com.

Report by Mark Caswell

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