Lufthansa wraps up BMI takeover deal

German national carrier Lufthansa has finalised a deal for bmi in the latest major takeover in the global aviation industry.

Under the terms of the £314 million agreement, Lufthansa will increase its controlling stake in BMI to 80 per cent, with the UK airline's chairman Sir Michael Bishop set to relinquish his majority stake as his carrier struggles to cope with increasingly tough economic conditions.

Furthermore, despite having just reported a 75 per cent fall in its profits for the latest quarter, it is also expected that Lufthansa will look to acquire the remaining 20 per cent of BMI from struggling Scandinavian Airlines (SAS).

At the same time, Virgin Atlantic has signalled its intention to form a major new partnership with the Lufthansa group of airlines, a development that would create Europe's biggest carrier should it go through.

"Everyone has speculated that it would make sense for Virgin Atlantic and BMI to combine their long-haul and short-haul networks," Steve Ridgway, Virgin Atlantic chief executive was quoted by the Independent as saying.

"I am sure that Lufthansa realises this could be a really good example of the right industry consolidation."

Presently, BMI holds 12 per cent of all take-off slots at London's Heathrow Airport, a share that has made it an attractive proposition for several suitors over recent years.

Posted by Paul, 30 October 2008 11:23

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