Lufthansa plans to sell BMI to rival BA
Source: Agencies |
November 5, 2011, Saturday
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Print Edition
Print Edition
GERMANY'S Lufthansa yesterday revealed plans to sell its British Midland (BMI) subsidiary to the owner of rival British Airways, having failed to turn the business around after nearly three years of ownership.
Lufthansa and BA's owner International Consolidated Airlines Group (IAG), said they have reached an agreement in principle. No financial details were disclosed but the deal requires regulatory approval.
BMI has its main hub at London's Heathrow airport, Europe's busiest, as does British Airways. It operates flights to Europe, the Middle East and Africa.
IAG is the holding company set up earlier this year that owns BA and Spain's Iberia.
Lufthansa said it aims to complete the sale in the first quarter of next year and plans call for a final purchase agreement to be signed "in the coming weeks."
Lufthansa and BMI belong to the Star Alliance, while BA is part of the rival Oneworld Alliance.
Lufthansa's involvement with BMI dates back to 1999. It took majority control nearly three years ago.
BMI has had a difficult year. Lufthansa said last month that, because of its strong presence in the Middle East and north Africa, the British airline's business suffered particularly badly from political turmoil there.
Lufthansa said its performance was also hit by "the weak economy in its British home market." BMI reported an operating loss of 154 million euros (US$212 million) for the first nine months.
The Lufthansa group includes Swiss International Airlines, Austrian Airlines and budget offshoot Germanwings.
Separately, IAG yesterday reported a decline in third-quarter profit. Although passenger revenue rose 3 percent, fuel and oil costs rose 25 percent.
Lufthansa and BA's owner International Consolidated Airlines Group (IAG), said they have reached an agreement in principle. No financial details were disclosed but the deal requires regulatory approval.
BMI has its main hub at London's Heathrow airport, Europe's busiest, as does British Airways. It operates flights to Europe, the Middle East and Africa.
IAG is the holding company set up earlier this year that owns BA and Spain's Iberia.
Lufthansa said it aims to complete the sale in the first quarter of next year and plans call for a final purchase agreement to be signed "in the coming weeks."
Lufthansa and BMI belong to the Star Alliance, while BA is part of the rival Oneworld Alliance.
Lufthansa's involvement with BMI dates back to 1999. It took majority control nearly three years ago.
BMI has had a difficult year. Lufthansa said last month that, because of its strong presence in the Middle East and north Africa, the British airline's business suffered particularly badly from political turmoil there.
Lufthansa said its performance was also hit by "the weak economy in its British home market." BMI reported an operating loss of 154 million euros (US$212 million) for the first nine months.
The Lufthansa group includes Swiss International Airlines, Austrian Airlines and budget offshoot Germanwings.
Separately, IAG yesterday reported a decline in third-quarter profit. Although passenger revenue rose 3 percent, fuel and oil costs rose 25 percent.
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