IAG gives way in an effort to seal BMI deal

 
City A.M. Reporter
BRITISH Airways owner IAG has offered concessions to EU antitrust regulators in a bid to get regulatory approval for its takeover of BMI, the low-cost British unit of German carrier Lufthansa, the European Commission said yesterday.

The Commission, tasked with ensuring a level playing field in the EU, did not provide details of the concessions, in line with its usual policy.

It extended the deadline for a decision on the deal to 30 March from 16 March, the EU executive’s website showed.

The BMI takeover would boost IAG’s share of runway slots at London Heathrow airport to about 52 per cent from 43.1 per cent, allowing it to launch lucrative long-haul routes.

IAG also declined to give details of the concessions.

Rival and failed BMI bidder Virgin Atlantic has urged antitrust regulators to veto the deal, saying it would harm competition and push up prices, given the concentration of ownership at close-to-capacity Heathrow.

The European Commission typically requires airlines to cede slots and offer rivals access to their frequent flyer programmes in return for clearing mergers and acquisitions in the sector.

Lufthansa promised to offer slots to allow new entrants to operate flights on four routes singled out by the regulator, during its 2009 takeover of SN Brussels Airlines.

Other concessions related to its code-share agreements and frequent flyer programmes.

Last week, UK consumer regulator the Office of Fair Trading said it would not open its own probe into the purchase, leading opponents to pin their hopes on the EU’s investigation.