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BMI being taken over by Lufthansa | BMI being taken over by Lufthansa |
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UK airline BMI is being taken over by Germany's Lufthansa. | UK airline BMI is being taken over by Germany's Lufthansa. |
Lufthansa, which already owns a 30% stake in BMI minus one share, is buying the 50% of the company owned by BMI chairman Sir Michael Bishop. | Lufthansa, which already owns a 30% stake in BMI minus one share, is buying the 50% of the company owned by BMI chairman Sir Michael Bishop. |
The deal will give Lufthansa control of more flights from London Heathrow airport than any other airline except British Airways. | The deal will give Lufthansa control of more flights from London Heathrow airport than any other airline except British Airways. |
The remaining 20% of BMI is currently owned by Sweden-based Scandinavian Airlines (SAS). | The remaining 20% of BMI is currently owned by Sweden-based Scandinavian Airlines (SAS). |
BMI flew 10.6 million passengers last year, and operates 70 aircraft. | |
Lufthansa said it intended to complete the deal by 16 January. It has not said how much it is paying for the 50% stake. | |
Sector under pressure | |
There had been growing speculation in recent months that Sir Michael was keen to sell his share in the business. | |
Last month, BMI declined to comment on reports that it had been approached by Abu Dhabi carrier Etihad over a possible merger. | |
Like almost all airlines, BMI has seen its profits hit this year by the big rises in the price of aviation fuel in the first half of the year. | |
This has led to a number of carriers seeking closer ties with rivals, such as British Airways plans for a tie-up with American Airlines. | This has led to a number of carriers seeking closer ties with rivals, such as British Airways plans for a tie-up with American Airlines. |
Other airlines have had to cease operations, including Zoom, XL and Sterling. | Other airlines have had to cease operations, including Zoom, XL and Sterling. |
Analysts said Lufthansa's relative financial strength, combined with the current troubles in the airline industry, meant it had been able to go on something of a bargain-hunting spending spree. | |
Earlier this year Lufthansa had bought a 45% stake in Brussels Airlines. | |
The BMI announcement came as Lufthansa announced a 75% fall in net profit for the July to September period, which it blamed on higher fuel costs. | |
However, aviation fuel is now falling in price as it trails the recent sharp declines in crude oil costs. |