Virgin upset at regulator's decision not to review IAG-BMI merger

The decision of the UK consumer watchdog, Office of Fair Trading (OFT), against reviewing British Airways' parent firm International Airline Group's (IAG) deal to buy BMI from Lufthansa, has upset rival Virgin Atlantic.

Virgin believes the OFT's decision would allow IAG to hold a near monopoly on slots at Heathrow airport.

By abdicating its responsibility, the OFT, which had until yesterday to decide whether to review the merger itself or leave it to the EU regulators, has now put the onus on the decision solely on the European Commission.

Although the OFT acknowledged there was "significant concern" for passengers travelling between Scotland and Heathrow, it said the job of addressing these issues was best undertaken by the EC.

"The proposed acquisition of BMI by IAG has generated a significant level of concern in the UK, especially in Scotland, the North West of England and Northern Ireland," said Sheldon Mills, OFT director of mergers.

"We consider that the transaction should be subject to a careful and detailed review and we will continue to work closely with the European Commission to ensure that UK airline passengers will not lose out through the proposed deal," he added.