MPs call for OFT to consider BMI takeover
31.01.12
Labour and the SNP have called on the Office of Fair Trading (OFT) to look at the takeover deal that would see BA's owners, International Airline Group (IAG), acquire loss-making BMI from German carrier Lufthansa, the Herald reports. It will give IAG 56 additional slots at Heathrow, with IAG expected to close down BMI and fears that it could cut flights to regional airports.
Speaking during a House of Commons debate on the Civil Aviation Bill, Labour Shadow Transport Secretary Maria Eagle last night said she was concerned about the impact the takeover would have on competition on domestic routes to Scotland and Northern Ireland, 'not least the price implications for passengers.' She said: ‘The Government has, to date, refused to take these concerns seriously and I can tell the House the Shadow Secretary of State for Scotland and I have now referred the sale of BMI to the OFT.’
She said that while there were precedents within the European Union for a single company to control a larger percentage of slots at any one airport ‘the situation at Heathrow is very different because of the capacity issues which significantly restrict the potential for competition’.
‘I fully under-stand and respect BA's wish to expand its operations, not least to pursue the new long-haul markets from Heathrow that are needed for our economic competitiveness. However, many, many years before a high-speed rail service becomes a reality between Scotland and London, and Heathrow in particular, we must balance the need to maintain the domestic air links on which the Scottish economy depends.’
SNP Transport spokesman Angus McNeil added he has also written to the OFT to raise concerns about the takeover and its impact on Scotland. He said: ‘It's a lose-lose situation for Scotland. I fly through Glasgow to London all the time and I believe the takeover will inevitably lead to less competitive pricing and not quite as good a service, because they won't face as much competition.’
An IAG spokeswoman said: ‘British Airways has a long history of flying between Scotland and London, including to and from Heathrow, and we fully intend to preserve these links.’ The OFT said it was aware of submissions from the SNP and Labour and was considering them. However, a spokesman for the watchdog said it could not take action until the European Commission is formally notified of the takeover.
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