Sir Richard Branson’s Virgin Atlantic airline will appeal against what it claims was Brussels’ “lightning speed” approval last month of the contentious takeover of BMI British Midland by International Airlines Group, the parent company of British Airways.
“We will challenge every aspect of this process which if allowed to stand, will undoubtedly damage the British airline industry for years to come,” said Sir Richard, Virgin Atlantic’s president.
Virgin, an arch-rival of British Airways, failed in its own bid for BMI, a loss-making subsidiary of German flag carrier Lufthansa, which IAG agreed to buy in December for up to £172.5m in cash.
Virgin loudly opposed the planned deal at the time, claiming it would cause competitive harm at Heathrow by putting BA in a position of market dominance at one of the world’s busiest airports.
Although BMI loses money, it is the largest holder of take-off and landing slots at Heathrow after BA, which is expected to use the BMI purchase to expand its long-haul network in lucrative emerging markets.
Lufthansa had blamed BMI for pushing it to a €13m net loss in 2011 and had warned privately that the subsidiary could be closed down if the European Commission did a lengthy probe into the IAG transaction, which was formally notified to the Commission on February 10 2012.
Joaquín Almunia, EU competition commissioner, announced the deal had been cleared on March 30, after IAG agreed to several measures to make it more competitive, including the relinquishment of up to 14 of BMI’s “very sought after” daily take-off and landing slots.
Virgin Atlantic will bid to operate most of the slots BA has agreed to give up to get the deal approved, and Sir Richard said on Sunday it was “crucially important” not to hand out these slots to several airlines because “effective competition can only be achieved by having a strong and visible alternative”.
He also said more slots should be released “in order to protect the millions of passengers who will see their options reduced by the takeover”.
“This deal was agreed with lightning speed and we think the number of slots offered is derisory,” said Sir Richard.
IAG said it was wrong to suggest the BMI deal had been done in haste without proper revew.
“We were talking to the European Commission for six months about this process and they did a very thorough and detailed examination of the case,” an IAG spokeswoman said. “We believe that the London market is highly competitive.”
Mr Almunia’s office had not responded to requests for a comment by press time.
Get alerts on Airlines when a new story is published