A report in The Sunday Times states the following:
"British Airways’ purchase of BMI British Midland is the deal — or should that be steal — of the year.
IAG, BA’s parent company, completed the acquisition quietly last week, save for the continued and fruitless protests of Sir Richard Branson, the majority shareholder in Virgin Atlantic.
Analysts and BA investors know it’s a smart deal for BA, consolidating its grip on Heathrow. But nobody has yet twigged just how good it is.
BA said it would pay Lufthansa £172.5m for BMI. That figure would be revised down if two of BMI’s subsidiary airlines, BMI Baby and BMI Regional, weren’t sold before the deal completed.
They weren’t. BA hasn’t revealed what the price came down to as a result, but insiders say it was about £20m. For that, BA receives 42 pairs of runway slots at Heathrow — the proverbial hen’s teeth of world aviation. That’s £476,000 a pair, an absolute snip when you consider slot pairs have regularly changed hands for £5m, and even £10m when a carrier was particularly desperate to push its snout into the Heathrow trough. When BMI valued its slots three years ago, it reckoned they were worth £770m.
While Willie Walsh, IAG’s chief executive, chuckles, BMI’s pilots and other staff fume. Their pension fund has a £100m deficit and has been handed over to the Pension Protection Fund (PPF), the government lifeboat for schemes whose supporting employer has disappeared.
Their retirement payments are likely to be limited to a maximum of £34,000. Long-serving pilots and executives would have expected much more. Lufthansa has tried to ease the pain with the payment of another £84m into a separate fund outside the PPF, but it’s not clear yet whether that will make up the shortfall."
Also there is mention of IAG not being able to find a buyer for BMI Baby / Regional and that a further 800 may go at these airlines !