British Airways parent group IAG has agreed to buy Lufthansa’s BMI operation in the U.K. for £172.5 million pounds, seeing off a counterbid from Virgin Atlantic Airways.
London-based IAG will add as many as 56 additional daily slots at Heathrow airport through the acquisition, and buying BMI brings access to the 8.5 percent of takeoff and landing slots the airline controls.
Talking about the implications of the deal for employees, IAG chief executive Willie Walsh said: “Given the scale of BMI’s losses, there is an urgent need to restructure the business.
“Unfortunately, this will mean some job losses but we will secure a significant number of high quality jobs here in the UK and create similar new jobs in the future.”
He added that the restructuring would be carried out over a three year period.
The deal remains subject to clearance by competition authorities, and Virgin has declared it will fight the deal.
In a statement, Sir Richard Branson, chairman of Virgin Group, said: “BA is already dominant at Heathrow and their removal of BMI just tightens their stranglehold at the world’s busiest international airport.
“We will fight this monopoly every step of the way as we think it is bad for the consumer, bad for the industry and bad for Britain.”