Published: 30 Oct 2008: Lufthansa is to buy a controlling stake in bmi for €400 million (£318 million) from Sir Michael Bishop.
As per the information available, BMI chairman Sir Michael Bishop will sell his 50 percent-plus one-share stake in the airline. The option won´t be exercised before January 12.
Lufthansa has set aside €400 million for the purchase.
Lufthansa already owns 30 percent of BMI and SAS AB, the Nordic region´s largest carrier, holds 20 percent, BMI spokesman Anthony Carew said. Lufthansa is expected to make a bid for the remaining 20 percent, which is owned by Scandinavian Airlines (SAS). SAS has put both the stake and itself up for sale.
Lufthansa´s acquisition of bmi will make it the second-largest operator out of Heathrow.
"For Lufthansa it would certainly be an excellent deal," reportedly said Douglas McNeill, an analyst at Blue Oar Securities in London. "It would greatly strengthen their position at what is arguably Europe´s preeminent airport. They seem intent on playing a leading role in the industry consolidation that is going on, reflecting their longer-term ambitions."
It is being reported that Virgin Atlantic has responded to the purchase of bmi by offering to combine its own operations with Lufthansa´s in a partnership that would create Europe´s dominant airline. A tie-up with Virgin would allow the German carrier to use the better-known Virgin brand to expand internationally and at Heathrow in particular.
During the first nine months of 2008, the Lufthansa Group generated revenues totalling 18.6 billion euros, a year-on-year increase of 13.6 percent. The traffic revenue rose by 17.9 percent to 15 billion euros. During the reporting period, the Group´s operating income increased by altogether 13.4 percent to 19.8 billion euros.
Lufthansa Group has achieved an operating profit of 984 million euros after nine months and the Executive Board expects a result around 1.1 billion euros for the full year.