Virgin Atlantic urges regulator to stop BMI-British Airways merger

Sir richard branson's Virgin Atlantic has lodged a formal complaint against the proposed merger of British Midland International (BMI) with British Airways to the European Commission (EC) on the ground that the merger would create a domestic monopoly resulting in high prices for travellers.

Virgin Atlantic, in which Sir Richard Branson's Virgin Group holds a 51-per cent stake, alleges that the deal would affect nearly 2 million passengers, who may have to pay higher fares and have limited choices for flights from Scottish airports to London Heathrow.

It said passengers would be left with a "choice of one" when flying to Heathrow from either Edinburgh or Aberdeen airport.

Virgin Atlantic, which has been opposing the merger since both carriers first started talks in September 2009, added in its complaint that British Airways could also increase fare prices, cut routes and the frequency of flights.

If regulators approve the deal, Virgin Atlantic argues that British Airway's would have an absolute monopoly of routes from Heathrow to Scotland's three largest airports - Edinburgh, Glasgow and Aberdeen.

In December 2011, International Airlines Group (IAG), the owner of British Airways and Spanish carrier Iberia, signed a binding agreement to buy BMI for £172.5 million from Lufthansa. Bmibaby and BMI Regional units were not part of the proposed takeover.