Lufthansa plans bmi take over
Lufthansa is buying a controlling stake in bmi for €400 million (£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
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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