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Virgin Atlantic complains to European commission over IAG’s purchase of bmi

Competition dispute over monopolies on domestic routes reawakens bitter rivalry with British Airways

Virgin Atlantic is increasing efforts to block the takeover of bmi by its arch-rival IAG – the parent group of British Airways – by making a formal complaint to the European commission, claiming the merger would create local monopolies and drive up fares.

IAG, which owns BA and the Spanish airline Iberia, beat Virgin to the acquisition of bmi from Lufthansa in a £172.5m deal last December that would give it more than half of the takeoff and landing slots at Heathrow.

Virgin’s new submission to the commission, which has responsibility for competition matters in the EU, says the takeover would leave three key domestic routes as BA monopolies, allowing the airline to increase fares dramatically in the absence of an alternative carrier for passengers.

Bmi is the second-largest airline flying out of Heathrow. According to Virgin, since bmi withdrew its flights to Glasgow in 2011, leaving BA as the sole operator on the route, fares have risen by 34% and the number of flights has nearly halved. BA said it had added 4,000 seats a week on Heathrow-Glasgow services last year.

Sir Richard Branson, president of Virgin Atlantic, said: “This takeover would take British flying back to the dark ages. BA has a track record of dominating routes, forcing less flying and higher prices. This move is clearly about knocking out the competition. The regulators cannot allow British Airways to sew up UK flying and squeeze the life out of the travelling public. It is vital that regulatory authorities, in the UK as well as in Europe, give this merger the fullest possible scrutiny and ensure it is stopped.”

Virgin fears that connecting passengers who currently change at Heathrow from bmi on to other airlines would be shepherded on to BA flights once the deal goes through.

The commission could give the go-ahead to the merger in mid-March or defer a decision. IAG said on Thursday it was confident that the authorities would approve the deal, and pointed out that its biggest European rivals had a greater share of slots at their respective national hub airports.

A spokesman said: “Selling bmi to IAG offers the best solution for British consumers and UK plc, securing more jobs than if the airline was broken up and sold off for its Heathrow slots.

“This deal is the only option for safeguarding services to the UK regions.” © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds