BMI takeover looks a bad deal for city, warns Darling

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FORMER chancellor Alistair Darling today voiced fears that British Airways’ takeover of rival BMI could mean a bad deal for air travellers between Edinburgh and London.

BA’s owner, International Airlines Group (IAG), announced yesterday it had agreed to buy troubled BMI, formerly British Midland, in a move which would secure it more than half the landing slots at Heathrow, the UK’s busiest airport.

Mr Darling, Labour MP for Edinburgh South West, said if the deal went ahead it would represent a major loss of competition on a vital route, and he suggested the Office of Fair Trading might want to look at the proposed sale.

He said: “If BA takes over BMI we are back where we were in the 1970s when only BA provided a service from Edinburgh to Heathrow.

“Given the vital importance of that route both for businesses and individual passengers, I would be extremely concerned at this loss of competition. When British Midland entered that route in the 1980s it sharpened up BA’s act and brought prices down.”

He said there were low-cost airlines flying from Edinburgh to London, but they went to Gatwick, Stansted or Luton.

“The Heathrow route is vital for Edinburgh. This is something the OFT might want to have a look at. We need either assurances in place to stop prices rising year-on-year or alternatively to look at getting someone else on to that route.”

Liz Cameron, chief executive of Scottish Chambers of Commerce, also expressed concern.

She said: “We have already experienced reduced flight capacity from Scotland to Heathrow under the BA strategy. Scotland needs to have reliable, affordable connectivity to London and ongoing internationally. The fear is that BA’s purchase of BMI will translate into fewer flights, limited competition, and increased costs to passengers.

“We are all very aware of the value of BMI’s landing slots at Heathrow. These should be safeguarded for domestic markets and not have the potential to place businesses operating in and out of Scotland at a disadvantage. We need some guarantees.”

IAG’s deal to buy BMI from German airline Lufthansa infuriated rivals such as Sir Richard Branson’s Virgin Atlantic.

Virgin, which said it had also made a bid for BMI, said: “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.”

The GMB union voiced fears about the jobs’ situation. The BMI group employs around 3600 staff.

Willie Walsh, head IAG, claimed the deal would be “fantastic” for passengers and the UK economy. He said: “We will expand our networks, particularly on long-haul which is so critically important to the UK economy.”

Asked about jobs, Mr Walsh said: “It’s far too early for us to say what the impact will be.”