BA parent agrees acquisition of airline
More potential members for Avios international loyalty scheme
British Airways parent company IAG says it has agreed a deal to buy airline BMI from Deutsche Lufthansa.
If the agreement goes through it means IAG (International Airlines Group) will control three airlines. IAG was formed by the merger of British Airways and Spanish airline Iberia.
The acquisition would mean more potential members for the new Avios international loyalty rewards programme, which was re-branded in September from the former UK Air Miles scheme. Avios currently has 17 million members between the three participating schemes of BA Executive Club, Iberia Airline loyalty scheme and Air Miles.
Last month Andrew Swaffield, MD of The Mileage Company which manages the Avios programme for IAG, told Loyalty Magazine that more airlines would be brought into the IAG operation over time.
IAG appears to have beaten off competition from Virgin Atlantic, which had struggled to find a partner to help it raise funds to bid for loss-making BMI, which operates 28 aircraft including 12 through the bmibaby low cost carrier.
IAG said the acquisition is still subject to a binding purchase agreement and regulatory clearance but it says a deal could be signed in Q1 next year.
BMI is the second-largest carrier at Heathrow, and buying it would make more take-off and landing slots at the airport available to IAG.
Virgin said that it was still working with Lufthansa over a possible deal, and added that an acquisition by IAG would be harmful to competition at Heathrow Airport: “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.”