Tag Archives: British Airways

BA parent agrees €355 million bid for BMI

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BA parent agrees €355 million bid for BMI

Nov 04, 2011 08:30AM GMT

BA parent agrees €355 million bid for BMI

British Airways/Iberia parent company International Airlines Group has agreed to buy loss-making Heathrow rival BMI from Lufthansa.

The deal, which will be seen as a major coup for IAG chief executive Willie Walsh, is expected to be completed early next year. Today’s announcement will come as a major blow to Virgin Atlantic which faces being further marginalised at the London hub.

BMI controls 9% of valuable take-off and landing slots at Heathrow, which is now operating at full capacity after plans to build a third runway were scrapped.

But the deal with IAG is likely to attract a competition probe over potential dominance of slots at Heathrow. BMI has 300 flights a week operating from Heathrow and recently sold six sets of slots to BA.

“It gives BA the opportunity to grow in the UK,” said Walsh, who admitted that the deal, reported to be worth €355 million, had yet to be finalised.

Walsh said the deal will mean IAG will have around half of the slots at Heathrow but this is still less than Lufthansa at Frankfurt and Air France/KLM has at Paris. The takeover of BMI will enable BA to expand its long-haul network.

Virgin Atlantic said: “British Airways’ hold over Heathrow is already too dominant and we are very concerned – as the competition authorities should also be – that BA’s purchase of BMI would be disastrous for consumer choice and competition.”

Speaking on BBC Radio 4’s Today programme this morning Walsh ruled out a bid for ailing Italian carrier Alitalia.

IAG said: “The sale and closing of the deal remain subject to conditions including a binding purchase agreement, further due diligence and regulatory clearances. It is envisaged that the purchase agreement will be signed in the coming weeks and the aim is for the transaction to be completed in the first quarter of 2012.”

BMI reported a loss of €154 million in the first nine months of 2011.

Heathrow owner slashes debt through stake sale

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Heathrow owner slashes debt through stake sale

Oct 11, 2011 07:50AM GMT

Ferrovial, the Spanish majority owner of BAA, has sold almost 6% of the UK’s leading airports operator for €325 million in a move that slashes its debt burden.

The sale to investment group Alinda Capital Partners leaves infrastructure company Ferrovial with a 49.99% holding in BAA, owner of Heathrow, Stansted, Glasgow and Edinburgh airports.

The sale of the 5.9% stake, less than an originally planned 10%, implied a total value for BAA of €5.52 billion (£4.7 billion), substantially less than the £10.3 billion Ferrovial paid for the airport operator in 2006. However, it is more than 2.5 times the value analysts have placed on BAA.

The company has already recouped £1.5 billion from the sale of Gatwick airport two years ago.

Ferrovial chief executive Iñigo Meirás Amusco said: “We wanted to put a real market value on BAA, as before it was low and now we have value more than double market expectations.”

By trimming its shareholding below 50%, Ferrovial will be allowed to remove BAA debts from its accounts, cutting its net debt from €19.7 billion to €5.2 billion.

BAA is poised to announce which of Edinburgh or Glasgow airports it is to sell following a ruling by the Competition Commission. It remains under an order to dispose of Stansted, but has lodged a further appeal.

The operator sold Gatwick in 2009 for £1.5 billion to a consortium led by Global Infrastructure Partners ahead of being ordered to do so by the Competition Commission.

No enhanced redundancy package for Co-op travel staff

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No enhanced redundancy package for Co-op travel staff

Oct 05, 2011 07:45AM GMT

The Co-operative Group has refused to give staff in the travel division an enhanced redundancy package being offered to employees in other parts of the business, despite appeals from unions and staff.

As part of a management integration programme the group is providing staff made redundant from the financial services and retail divisions with a topped-up package of statutory redundancy multiplied by three, with an extra eight weeks.

However, despite protests from the unions, the group has said it would be “inappropriate” to extend the offer to travel staff, who will transfer employment to Thomas Cook under the terms of the joint venture. The merger was officially completed on Tuesday.

The Co-op has yet to reveal how many travel staff will lose their jobs, but some said the decision showed the company was “washing its hands” of travel.

One employee said: “From a company that boasts about its ethical and moral values and how it treats its staff, it is going in the face of that to discriminate against the travel staff. It is washing its hands of travel in a joint venture that will save millions.”

Trade unions the National Association of Co-operative Officials (Naco) and Usdaw, fought the decision at a meeting with Co-operative Group chief executive Peter Marks on September 29. Marks is also a non-executive director of the travel joint venture.

Neil Buist, general secretary of Naco, said: “While we have made every effort to secure enhanced redundancy terms for those affected by the joint venture, unfortunately the group chief executive has confirmed the enhanced terms will not be extended.”

A spokesman for the Co-operative Group said: “The group chief executive has listened to the submissions but has determined that it would not be appropriate in the case of employees joining the new joint venture to introduce a discretionary ‘top-up’ to our present terms.”