International Airlines Group has offered a limited number of extra concessions to try to secure regulatory approval for its acquisition of BMI British Midland, Lufthansa’s lossmaking UK subsidiary.

IAG, parent of British Airways and Iberia, has sweetened its offer to the European Commission by increasing the number of valuable take-off and landing slots at London’s Heathrow airport that it would relinquish under the proposed deal from 10 to 14.

In a high-stakes move, Lufthansa and IAG are increasing the pressure on the Commission to grant a quick approval of the deal by warning that BMI could face closure if Brussels proceeds with an in-depth investigation of the transaction that could last months.

Joaquín Almunia, EU competition commissioner, must decide by March 30 whether to approve IAG’s purchase under Brussels’ phase one inquiry process. He is travelling to Washington early next week, adding pressure to the negotiations with IAG.

IAG, Lufthansa and the Commission declined to comment.

Lufthansa wants to offload BMI rapidly because it is heavily lossmaking. BMI reported an operating loss of €199m in the year to December 31, up from €145m in 2010. It blamed its UK subsidiary for pushing the German flag carrier to a €13m net loss in 2011.

IAG is keen to buy BMI because it would give the Anglo-Spanish group the chance to expand at capacity constrained Heathrow.

Virgin Atlantic, which failed with its bid for BMI, has been calling on regulators to block the IAG deal or extract big concessions on slots. Virgin has been highlighting the fact that BA, by combining with BMI, would become the sole provider of flights between Heathrow and Aberdeen, Basel, Edinburgh, Manchester and Nice.

By buying BMI for up to £172.5m in cash, IAG would increase its share of Heathrow slots from 44.8 per cent to 53.5 per cent.

IAG would secure 56 pairs of daily take-off and landing slots held by BMI under the transaction. IAG initially proposed relinquishing 10 pairs of slots to secure approval, believed to cover routes to Aberdeen, Cairo, Edinburgh and Riyadh. The Commission said the concessions were unlikely to be adequate.

Relinquishing any more than the 14 pairs of slots IAG is now proposing risked undermining the case for buying BMI, given that it was lossmaking, said one person familiar with the group.

A person close to Lufthansa said it could consider closing BMI if the Commission decided not to approve the sale to IAG under its phase one inquiry process.

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