British Airways Owner IAG Offers More Remedies for BMI Deal

European Union Competition Commissioner Joaquin Almunia said he’s studying additional remedies offered by British Airways’ parent International Consolidated Airlines Group SA (IAG) in its bid to acquire Deutsche Lufthansa AG (LHA)’s BMI unit.

IAG (IAG) has offered additional measures to assuage EU antitrust regulators after its initial proposals were rejected by parties that may be affected by the deal, Almunia told reporters in Brussels today. Virgin Atlantic Airways Ltd. and Scottish lawmakers oppose the deal, saying it would eliminate passenger choice by giving British Airways a monopoly on routes from Scotland to London’s Heathrow airport.

“The Commission must not waver from its purpose of protecting competition and with it the best interests of the consumer,” Virgin Atlantic said in an e-mailed statement in response to Almunia’s remarks today. “We will continue to challenge this deal unless robust remedies are offered which protect the best interests of the passenger.”

IAG, based in London, agreed in December to buy BMI, the second-biggest operator at London’s Heathrow airport, for 172.5 million pounds ($274 million). The carrier wants to use BMI’s take-off and landing slots to expand British Airways flights to fast growing emerging markets in Asia and Latin America.

‘Remedy Slots’

“We received yesterday additional proposals for remedies coming from IAG,” Almunia said. “The original remedies proposed by IAG were market tested and the opinion of the stakeholders consulted was negative.”

Virgin Atlantic, based in Crawley, England, said in the statement that it would use any “remedy slots” that it may acquire from IAG, as part of regulatory clearance, on routes where British Airways would otherwise hold a monopoly.

IAG Chief Executive Officer Willie Walsh said March 20 that loss-making BMI would likely fail to survive if European antitrust regulators block the deal. Lufthansa CEO Christoph Franz said separately on the same day that disposing of BMI was the only way of safeguarding jobs at the carrier.

“I know the situation of many people working in BMI and many people having bought tickets on BMI flights,” Almunia said. “So I will try to advance as much as possible the analysis of how we can decide on this case.”

The European Commission has set a deadline of March 30 to rule on the deal.

To contact the reporters on this story: Peter Chapman at pchapman10@bloomberg.net; Steve Rothwell in London at srothwell@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net. Chad Thomas at cthomas16@bloomberg.net

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