Following the recent purchase of struggling firm BMI, Virgin Atlantic have branded British Airways owner IAG anticompetitive, after gaining an overall majority of runway slots at Heathrow Airport.
The airline has claimed that IAG – which formed earlier this year when BA and Iberia merged – could use its newly found domination to push prices up for British travellers resulting from a lack of consumer choice.
IAG confirmed plans to buy BMI for £172.5million, once completed the firm will own 53% of the slots at Heathrow Airport.
The company, which already own 46 per cent of the slots at Heathrow, have said the acquisition will allow the group to rival main European competitors and enable them to offer more flights to Asian destinations including China, Vietnam, Korea and Indonesia.
However, Virgin Atlantic have blasted the deal, with boss Sir Richard Branson stating that it “tightens their (IAG’s) stranglehold at the world’s busiest international airport”.
A spokesperson for the airline announced: “If the acquisition is completed, it will tilt the competitive landscape dangerously towards BA and cast a shadow over the British travelling public”.
“We will be asking the competition authorities to stop this deal and to protect the many millions of passengers on routes where BA and BMI currently complete”.
“With Heathrow sewn up, BA can use its monopoly power to force up prices at the expense of the consumer”.
Willie Walsh, chief executive for IAG has welcomed the move, stating it’s “good news for the UK”.
He believes the extra slots will allow the airline to launch new long haul routes, and also confirmed that it will maintain its domestic network”.
Sir Richard however has hit back with claims stating: “That this deal is about new markets from Heathrow is a smoke-screen. This deal simply cuts consumer choice and screws the travelling public”.
Virgin Atlantic had also placed a bid for the struggling firm, however pulled out claiming it would not ‘overpay’ for the airline just to stop its rival.
IAG have announced plans to cut jobs at BMI, as part of an effort to stem losses, however the company will try and protect more jobs compared to the potential losses, which would come with the closure of BMI.
