IAG gets bmi at knock down price
International Airlines Group (IAG) has completed the purchase of bmi from Lufthansa, but has been saddled with bmibaby and bmi regional.
Under the deal, Lufthansa had been trying to offload bmibaby and bmi regional before the deal went through, but has failed to do so.
In a statement this morning, British Airways’ parent IAG said under the terms of the purchase agreement, it will also acquire these businesses but with a "significant" price reduction.
Some analysts believe this could be as much as £80 million off the £172.5 million price.
The discount takes into account financial liabilities and losses that IAG is taking on.
IAG confirmed today that bmibaby and bmi regional are not part of its long term plans and will not be integrated into BA.
"IAG will pursue options to exit these businesses and more details will be provided in due course," said its statement.
"The costs associated with exiting these businesses, including the impact of operating them in the short term, are expected to be offset by the price reduction."
IAG said it will update investors about the bmi integration plan at its first quater results on May 11, 2012.
From today, bmi mainline flights will begin to be sold through BA as well as through bmi.
by Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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