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BMI being taken over by Lufthansa BMI being taken over by Lufthansa
(10 minutes later)
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).
Lufthansa said it intended to complete the deal by 16 January. BMI flew 10.6 million passengers last year, and operates 70 aircraft.
Abu Dhabi speculation Lufthansa said it intended to complete the deal by 16 January. It has not said how much it is paying for the 50% stake.
There has been growing speculation in recent months that Sir Michael was keen to sell his share in the business. Sector under pressure
Last month BMI declined to comment on reports that it had been approached by Abu Dhabi carrier Etihad over a possible merger. There had been growing speculation in recent months that Sir Michael was keen to sell his share in the business.
For its part, Etihad would only say it had spoken to a number of carriers. Last month, BMI declined to comment on reports that it had been approached by Abu Dhabi carrier Etihad over a possible merger.
BMI flew 10.6 million passengers last year, and operated 70 aircraft. 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.
Like almost all airlines, BMI has seen its profits hit this year by the continuing high price of aviation fuel.
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.