BMI comes under the wing of British Airways

IAG, the owner of British Airways, has announced that they will purchase BMI from its previous owner Lufthansa for a grand total of £172.5m, but is warning those with BMI that the purchase may result in the loss of jobs.  IAG also owns Iberia and as a result of the new purchase will gain access to 56 new docking bays at the Heathrow Airport.

Both airlines hope to see the takeover completely finish by the end of the first quarter of 2012 although the deal needs to be cleared by the competition bodies first and Virgin has already announced that it will oppose the new purchase.

Although Lufthansa had signed a preliminary agreement for the purchase with IAG back in November it did still conduct talks about a potential deal with Virgin instead.

Chairman for Virgin Group Sir Richard Branson stated that BA is already the dominant airline at the Heathrow Airport and that by taking over BMI they will have an even tighter hold on the largest international airport in the world.  Therefore, Virgin plans to fight the monopoly as they believe it is bad for Britain, the consumer, and the industry.

During 2010 BMI reported a £153m loss making it urgent that the company decide to restructure which will mean that some of the 3,600 employees at BMI are going to face redundancy.

However, in the figure IAG chief executive said that more jobs will be created as the three year restructuring process of the business is completed.  BMI operates flights to Africa, Europe, and to the Middle East and currently holds 8.5% of the docking slots at Heathrow which is the real reason that airlines actually wanted to purchase the failing airline company.  Subsidiaries of BMI also include BMI Regional and BMI Baby which are not yet up for sale.