Future Unclear For Bmibaby As BA Takes Over

The parent company of British Airways is set to acquire bmibaby and bmi Regional, after completing its takeover of the airline's mainline business.

Under the terms of its agreement to purchase BMI from Lufthansa, International Airlines Group (IAG) will receive a significant discount on the £172.5m price tag to take on the two subsidiaries as they were not sold prior to the completion of the deal.

IAG reiterated that bmibaby and bmi Regional are not part of its long-term plans and the group will look to sell them on, with the discount expected to offset the costs of the process and the impact of running the businesses in the short term.

Bmibaby was started in 2002 and flies out of Belfast, Birmingham and East Midlands airports, while bmi Regional offers short-haul flights from Aberdeen, Edinburgh, Glasgow, Leeds Bradford, Manchester and East Midlands.

IAG, which also owns Iberia, has already begun consultations into integrating BMI into British Airways, but has warned that the takeover would result in the loss of up to 1,200 jobs at BMI's head office at Castle Donington in Derbyshire and at regional airports.

It added that without the acquisition, all 2,700 jobs at bmi could have been lost.

The takeover was approved by the regulator in March on the condition that IAG gives up 14 pairs of daily take-off and landing slots at Heathrow as a contribution to boost competition in the sector.

Sir Richard Branson, whose Virgin Group owns 51% of Virgin Atlantic, has opposed the deal from the start.

Virgin Atlantic said it will bid for the slots that have been put up for sale and appeal the "lightning" quick decision by the European watchdog to allow the takeover to proceed.