Monday, 16 January 2012

Virgin Atlantic angry over IAG expansion strategy

Virgin Atlantic have stepped up their displeasure for the proposed takeover of BMI by IAG by calling for UK competition authorities to scrutinise the deal in the hope that they will be more inclined to block a deal than the competition authorities in Brussels.

Steve Ridgway, Chief Executive of Virgin Atlantic believes the move is "so anti competitive" that it merits an in-depth investigation by the UK Competition Commission. The real rub of the deal for Virgin Atlantic is the acquisition of BMI's landing slots at Heathrow as the airline is second behind BA for the highest number of slots. If the deal does go through  between IAG and BMI it would leave IAG with 53.5% of slots. This figure is 17 times larger than Virgin Atlantic's share as the airline currently only have 3.1% of slots.

Ridgway also stated that if Virgin's bid for BMI had been successful, it would have retained important internal flights  between Heathrow and Edinburgh. He goes on to state that if the deal does go through it must be on the basis of IAG selling a "large number" of Heathrow slots.

The infighting between the two largest British airlines could be good for British customers but the airlines must keep an eye on other carriers such as Etihad and Emirates who continue to grow exponentially rather than each other.