30 October 2008

Lufthansa plans bmi take over

Lufthansa is buying a controlling stake in bmi for â'š~¬400 million (Ã&#pound;318 million).

The German carrier, which already owned 30% of the airline, is buying the 50.1% share owned by the UK airline's founder Sir Michael Bishop.

Lufthansa signed an agreement with Sir Michael in 1999 which said that if he ever wanted to sell his stake, it would make the purchase.

Analysts now expect Lufthansa to make a bid for the remaining 20%, currently owned by SAS.

Bmi controls 11% of landing and take-off slots at London Heathrow, making it the second largest airline operating out of the airport behind British Airways.

If concluded, the deal would open the door for Lufthansa to start transatlantic flights from Heathrow.

Throughout its network, Bmi employs around 5,000 people, with a fleet of around 54 aircraft on both scheduled and charter services, and flew 10.6 million passengers in 2007.

Lufthansa said it plans to complete the deal no earlier than January 12. It refused to confirm the amount it had paid for the extra 50% stake.

Industry sources suggested that bmi's low cost arm bmibaby would be sold if the deal with the German carrier goes through. 

Speaking to analysts as the airline unveiled its third quarter results today, Lufthansa chairman and CEO Wolfgang Mayrhuber said: "Ahead of us lies a challenging and doubtlessly difficult time, which for various reasons can change the course of the entire industry as well as that of Lufthansa.

"We know that new challenges await us, daily. They only spur us on and we welcome them. We are equipped with a stable management, outstanding specialists and a service-oriented team, who work willingly and well with partners. That is Lufthansa attribute. "

*See related story - Virgin expresses interest in tie-up with bmi

By Bev Fearis

• PRINT
• SEND TO A FRIEND
• SHARE

Post your comment

Your Comments (2)

, be the first to post a comment.
Your email:

Your comment title:


Your comment:

Email other comments made to this story

5 characters

• not sure
  
  

  cant decide whether this is a good or bad thing ...

  By sharon robertson, Friday, October 31, 2008
• No way BA
  
  

  Lets all rejoyce that BA did not take over BMI.

  By Paul Neaves, Wednesday, October 29, 2008