WILLIE WALSH, chief executive of the International Airlines Group (IAG), has indicated that he will retain BMI’s services from London Heathrow to Dublin and Belfast if he receives regulatory clearance next year for its £172.5 million acquisition of the British carrier from Lufthansa.
He also wants to retain British Airways’ code-sharing agreement with Aer Lingus, which involves the Irish airline feeding traffic into BA’s long-haul services at Heathrow.
IAG is the umbrella company for BA and the Spanish carrier Iberia.
Speaking to The Irish Timesyesterday, Mr Walsh said: "On Belfast, we already get some traffic feed from BMI so our intention is to maintain the Belfast-to-Heathrow service.
“In Dublin, we have a great relationship with Aer Lingus and hopefully we’ll be able to retain that in addition to operating the services directly as well.”
IAG has signed a binding deal to purchase BMI, having agreed a memorandum of understanding on a deal with Lufthansa in November.
Virgin Atlantic also sought to acquire BMI and yesterday described the deal as bad for consumer choice.
The deal will give BA 56 additional slot pairs (a slot is a take-off or landing) at Heathrow and consolidate its position as the biggest carrier at the London airport.
Lufthansa has agreed to take on BMI’s defined benefit pension scheme obligations.
Mr Walsh said IAG will retain the BMI brand in the “short term” at least but said BMI’s long-haul services from Heathrow would be rebranded under the BA banner.
“BMI has good recognition in the UK, Ireland and some other places in Europe but it’s not a global brand,” he explained.
Lufthansa has an option to sell both the BMI Baby and BMI Regional businesses before completion of the transaction.
Ideally, IAG does not want to buy either business. Mr Walsh said “detailed” talks have taken place with interested parties in relation to BMI Regional and some “early discussions” in relation to BMI Baby.
If IAG acquires these two divisions, the price of the transaction will be reduced significantly.
“It would be our intention to sell those businesses upon acquisition,” he said.
Mr Walsh said IAG’s focus next year will be on sorting out BMI’s losses. It reported a pretax loss of £153 million on revenues of £777 million in 2010.
“The losses are very significant and that’s going to take up a bit of resources on our part.”
He said other acquisitions were a possibility. So is Aer Lingus on IAG’s radar, given that both the Government and Ryanair have indicated their willingness to sell their stakes in the airline? “No. There are several issues that Aer Lingus needs to address before anyone would express an interest in them. It could be in play but we’ve had no discussions and we’re not going to have any discussions with the Irish Government or with Ryanair.
“I think there are a lot of things that need to be clarified with regard to Aer Lingus before anybody will have a serious interest,” said Mr Walsh.