BMI takeover prompts formal complaint to European Commission

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Saturday, 18 February 2012 00:08
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By a Newsnet reporter 
 
A planned takeover of BMI by International Airlines Group has led to a complaint to the European Commission amid claims that it could hit air links between Scotland and Heathrow.
 
Both Richard Branson’s company Virgin Atlantic and Colin Keir MSP have made a formal complaint to the European Commission and the UK Office of Fair Trading in a bid to have the deal blocked on grounds of competition and consumer services.

Colin Keir, SNP MSP for Edinburgh Western, cited research showing that the purchase of BMI by International Airlines Group (British Airways) would have a dire effect on air links from Scottish airports.

According to Virgin Atlantic flights will be cut and fares could rise by a third between Scotland and London. 

When BMI withdrew flights from Glasgow to Heathrow in 2011, BA got a monopoly on the route, average passenger fares increased by 34% while flights were cut by almost half.

Mr Keir, has written twice to the OFT & Commission and also lodged a motion in parliament about this matter and whose constituency covers Edinburgh Airport, said:

“If the BA deal goes through, hundreds of thousands of Scottish passengers and businesses would be restricted to one airline – that can’t be good for competition and passenger choice.

“Competitive air links between Heathrow and Edinburgh are crucial for our city’s economy, businesses and the one million passengers who travel between the two airports each year.

“If the research is accurate, when BA became the sole operator of the Glasgow-Heathrow route passenger fares increased by 34% while flights were cut by half. That’s why it’s crucial that we retain competition in Edinburgh.

“The impact would also increase the travel cost of some 300,000 small businesses that are reliant on affordable connections to London.  

“I’ve written to the European Commission and the Office of Fair Trading calling on them to scrutinise the deal and prevent it from going ahead.”

Also voicing his concern is Alyn Smith MEP who said that the resulting monopoly on flights to Heathrow airport from a number of Scottish airports could spell "bad news for Scottish passengers".

Earlier this week the SNP MEP joined with all of Scotland’s MEPs in writing to Competitions Commissioner Joaquín Almunia, raising their shared concerns about the implications of the takeover.
 
Commenting, Alyn said:

“Clearly, I would rather Scots passengers flew direct to their destinations, but the fact is a significant number of travellers use Heathrow as a staging post.   The proposed acquisition of British Midland Ltd (BMI) by IAG could have a significant damaging effect on choice and competition for passengers in Scotland.

“If this move goes ahead IAG would have a monopoly on the Edinburgh-Heathrow and Aberdeen-Heathrow routes: this could lead to reduction in service and increase in price.

“This could also prove problematic logistically for passengers who have connecting flights with all flights from Aberdeen and Edinburgh being forced through Heathrow’s Terminal 5."

Comments  

 
# UpSpake 2012-02-18 10:23
IAG - British Airways have bigger fish to fry. Slots are much more valuable to them than piddling little flights to that other country whatjimacallit oh yes Scotland.
The airline British Airways is the outward visible emblem of the british establishment who like nothing better than strutting the world stage. the Flag carrier as it is often known is just that so why waste valuable international exposure by flying the flag inside whatever might remain of the UK ?. Scotland can go fly a kite as far as London is concerned, and may well have to.
 
 
# rapid 2012-02-18 10:53
The price of a business BA red-eye down and back from glasgow has rocketed from 340 to over 500 since bmi stopped their glasgow to LHR service. Also, BA have cut flights and the first flight leaves after 7am leaving it too late for a 10am meeting in the city.

If this happens to EDI, then a lot of scottish firms won't be as competitive. I, like many scots, fly up and down more thsn 20x a year
 
 
# Robert Louis 2012-02-18 11:18
Thank goodness this matter is finally getting pushed up the agenda. The problem with what is happening, is that BA will acquire the slots that BMI had. This will mean, that even if another airline wanted to run a service from say, Edinburgh, to Heathrow they couldn't as BA would own all the available slots.

It is a scandal. Totally uncompetitive, and will leave Scotland isolated. No matter what we currently think of London, the simple fact is, it is the biggest hub for international flights and European flights near to Scotland. Sure, Amsterdam and Paris are alternatives, but it is bad for business, and bad for consumer choice for BA to have an outright MONOPOLY to run flights to London, with absolutely NO possibility of a competitive service getting started, as BA owns all the slots.

This needs pushed hard by the SNP. Really, really hard.

As for BA, I've nothing against them per se, aside from stifling competition. They are a good airline, and we need to be careful to focus on the issue here, and not just get involved in bashing BA, because they are a 'flag carrier' or whatever. That is just silly.

Frankly, I don't care if they are a 'flag carrier', I just care about Scotland having good competitive air links to ALL London airports.
 
 
# RTP 2012-02-18 12:14
pressandjournal.co.uk/.../...

pressandjournal.co.uk/.../...

These are two links worth a read about BA and its disregard for Inverness it is now hopeless to get to Heathrow and if you do it costs a fortune,BA just wanted the slots for more profitable flights just like others Scotland oh forget them we don't care.

You will note a certain name in both reports a certain Danny Alexander now who is he I wonder.??
 
 
# Old Smokey 2012-02-18 12:15
The answer is simple (almost)
First there is BMI Regional which is not part of the BA deal. BMI Regional is being sold off seperately, which was supposed to have concluded at the end of last year but has been delayed [http://www.flightglobal.com/news/articles/delay-hits-bmi-regional-sale-process-368056/ ]
Its planned that this will be the core of a Scottish airline based in Aberdeen
The BMI Regional fleet consists of 4 x ERJ-135s and 15 x ERJ-145s (embraercommercialjets.com/.../...)
Secondly what should happen is that BA are forced to give up the BMI slots at heathrow that are tied with the Scottish routes and handed over to the new airline
This will ensure continued competition and of course Scots' will be encouraged to support their own airline.
Ok I said it wasnt simple, the aircraft that BMI Regional have are not ideal for the Scotland to London services, as it should be the larger aircraft from airbus (a319 / a320), Boeing (737) or Embraer (E190/E195).
In addition the new airline would have also negotiate some interline agreements with large trans continental carriers, such as Virgin, Delta. Singapore Airlines. To get single ticketing codeshare agreements in place, so that these airlines can feed passengers into the new airline.
Realistically? - its impossible in the time frame! but we do like a challenge, dont we?
 
 
# MickDee 2012-02-18 13:00
The reason for Embraers being on the routes comes down to economics. BMI couldn't make money using an airbus. Also, BAA don't make much money out of small jets at heathrow. They want to maximise the landing fees for every slot.
 
 
# Old Smokey 2012-02-18 12:20
Of course the other answer to all this, is to encourage Richard Branson to get himself involved with the new Scottish Airline (I mentioned above), either as a part share or otherwise, so that the new airline has his clout behind them in developing fast to acheive the goals I outlined above. That would really annoy BA. Secondly Virgin could also start some direct services from either Glasgow or Edinburgh, to either North America and/or Hong Kong. So negating the requirement of people having to fly to Heathrow to get onward connections.
Anyway all [airline]food for thought -discuss :)
 
 
# Arbroath1320 2012-02-18 14:43
O.S. Virgin did get involved in the original bidding process with Lufthansa for B.M.I. last year but their bid was, obviously, rejected in favour of I.A.G. (B.A.).

bbc.co.uk/.../...

If the European Commission have any guts at all they will tell Lufthansa to withdraw the sale of B.M.I. to B.A. and accept the original bid from Virgin.
 
 
# Old Smokey 2012-02-18 15:20
The sale of BMI is actually complete
but Virgin can still get involved with BMI Regional as that is a completely seperate deal to that of BMI
The delay in 'Granite Aviation' completeing the purchase of BMI Regional is down to the fact that they are not an existing airline so infrastructure in place, but if 'Granite Aviation' got together with Virgin, that might be able to workin offering competing services from/to London
I agree London is not the be all and end all as we do have good connections via Frankfurt and Amsterdam. But to have a copetitor against BA, that is backed up by Virgin will spoil BA's little party
 
 
# MickDee 2012-02-18 12:36
Unless you absolutely have to go to Heathrow, the better option for a hub is now Frankfurt, Schipol or Paris which are all connected to Scottish airports.
I believe that bmi will not disappear completely. Their bmi regional airline will still be operating. Perhaps they will be able to set up some more convenient routes out of Scotland with government support.
 
 
# McDuff 2012-02-18 13:16
In the seventies British Caledonian flew to the U.S and BA flew to Toronto and New York in the summer but` BA THE NATIONAL FLAG CARRIER` can`t even manage one international flight out of this country,they are just not interested.
We just keep walking backwards under Unionism.
 
 
# Infirtaris 2012-02-18 15:27
Quoting McDuff:
In the seventies British Caledonian flew to the U.S and BA flew to Toronto and New York in the summer but` BA THE NATIONAL FLAG CARRIER` can`t even manage one international flight out of this country,they are just not interested.
We just keep walking backwards under Unionism.


Absolutely right McDuff! Caledonian Airlines posted profits every year in its 10 year life span and provided excellent service until it was swallowed up by BA.

I think the Scottish government should think local and support Loganair who has the potential to expand but has had to operate as a franchise for bigger unionist or foreign airlines.

Loganair just celebrated its 50th year providing airline services to Scotland.

I think that should be rewarded and the Scottish government should help Loganair "Scotland Airline", expand become competitive and fly under its own colours or colours of Scotland.

BA is a ruthless company and will seek to squash any competition it doesn't have a stake in.

In the same vein I think the Scottish Government should buy Edinburgh Airport. I think publicly owned services are going to be better for Scotland's future than private companies only caring about what their fat cat investors want.
 
 
# MickDee 2012-02-18 13:26
I won't be commenting anymore as it always takes at least an hour for my comments to appear thereby losing the thread. All the best for the future.

[New posters should be aware that it can take some time to get the privilege of having posts appear as soon as they are posted - NNS Mod Team]
 
 
# gopher3 2012-02-18 15:18
It annoys me that people in Scotland, who want to fly to USA, have to go to London, get on a plane, then fly back over Scotland to get there.
 
 
# oldnat 2012-02-18 15:31
I fly direct from Glasgow or Edinburgh to Newark.
 
 
# alicmurray 2012-02-18 16:18
I fly from Glasgow via Iceland to Boston.
 
 
# Mad Jock McMad 2012-02-18 16:05
I prefer Schipol masel' - only use London for Mid-East, South East Asia on price grounds.
 
 
# Arbroath1320 2012-02-18 21:49
I guess Emirates are a wee bit expensive from Glasgow are they MJM?

I only ask because as some may know they are about to start a second daily service from Glasgow from June.

bbc.co.uk/.../...

Looking, as I do, on Flightradar24, this would, on the face of it appear to be a good option to avoid London when flying to Asia. However, I bow to your greater knowledge.
 
 
# Angry_Weegie 2012-02-18 16:11
A BA monopoly would make Edinburgh as uncompetitive as Glasgow in terms of both cost and availability. However, EU intervention is our only hope as BA won't give up the slots and I can't see Wesrminster putting pressure on them to do so. Surely the way forward is to improve direct Scottish links to more European destinations which would be good for its own sake as well as providing a greater choice of long haul hub.
 
 
# CapnAndy 2012-02-18 19:15
Virgin does have a summer service from Glasgow to Orlando. However, with that said, Mr Branson should stop complaining about BA, put his money where his mouth is and provide some competition on the route. BA, in fairness are looking after their bottom line, which is what they've always done. The real baddies here are Lufthansa/Star Alliance who pinched the Glasgow landing slots at Heathrow and, by the way, just happen to code-share with Virgin.
 
 
# Fourfolksache 2012-02-19 15:42
AS already said it is impossible for anyone to compete with BA on GLA&EDI to LHR. I won't bore you with why as it would take too long. Take my word for it I worked for bmi for 25 years
The regulator could easily insist on a guaranteed capacity and a fair pricing mechanism as part of the deal for BA to take over bmi. Will they do it? I doubt it
All they care about is London and the South East!!!!!
 
 
# Hing em high 2012-02-20 20:29
By shopping around, I have always managed to avoid London Hep. BA for long haul sucks anyway!
 
 
# robroy 2012-02-22 06:54
After returning from the far east , I had to wait over 5 hours for BA to give me a connecting flight from Gatwick to Glasgow. Now London and BA are avoided like the plague.
 

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