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BMI sold by Lufthansa to British Airways owner IAG | BMI sold by Lufthansa to British Airways owner IAG |
(about 1 hour later) | |
Lufthansa has said it is selling British Midland (BMI) to International Airlines Group (IAG), which owns British Airways and Iberia. | Lufthansa has said it is selling British Midland (BMI) to International Airlines Group (IAG), which owns British Airways and Iberia. |
No details have yet been given of how much will be paid for the loss-making carrier. | No details have yet been given of how much will be paid for the loss-making carrier. |
The airlines said they hoped to sign a purchase agreement "in the coming weeks" and complete the deal before April 2012. | The airlines said they hoped to sign a purchase agreement "in the coming weeks" and complete the deal before April 2012. |
The sale still has to be cleared by regulators. | The sale still has to be cleared by regulators. |
BMI, which is based in Castle Donington in Leicestershire, operates flights to Europe, the Middle East and Africa. | BMI, which is based in Castle Donington in Leicestershire, operates flights to Europe, the Middle East and Africa. |
The key issue for regulators will be the extra take-off and landing slots at Heathrow Airport that BMI owns. | The key issue for regulators will be the extra take-off and landing slots at Heathrow Airport that BMI owns. |
The acquisition would mean that IAG would have more than half of the landing slots at the UK's busiest airport. | The acquisition would mean that IAG would have more than half of the landing slots at the UK's busiest airport. |
Virgin Atlantic, which said it had also made a bid for BMI, is likely to strongly oppose the deal. | Virgin Atlantic, which said it had also made a bid for BMI, is likely to strongly oppose the deal. |
"British Airways' hold over Heathrow is already too dominant and we are very concerned - as the competition authorities should also be - that BA's purchase of BMI would be disastrous for consumer choice and competition," Virgin Atlantic said. | "British Airways' hold over Heathrow is already too dominant and we are very concerned - as the competition authorities should also be - that BA's purchase of BMI would be disastrous for consumer choice and competition," Virgin Atlantic said. |
Geoff van Klaveren from Deutsche Bank said the deal would make a big difference for IAG. | |
"It boosts their slots at Heathrow to 54% share from 45%. Given that no new runways are likely to be built in the South East of England in next 10 years, this is a crucial strategic move," he said. | |
Lufthansa bought the 50% of BMI owned by its then chairman Sir Michael Bishop in 2008, taking its holding to 80%. | Lufthansa bought the 50% of BMI owned by its then chairman Sir Michael Bishop in 2008, taking its holding to 80%. |
It decided to sell it as the carrier's losses widened. | |
It reported a loss of 154m euros ($213m; £133m) for the first nine months of this year, hit by rising fuel costs and social unrest in some of its destinations in North Africa and the Middle East. | |
BMI also has a no-frills subsidiary called BMIBaby and the Aberdeen-based BMI Regional. | |
BMI announced on 28 October that it was in advanced talks to sell BMI Regional to a UK-based investor group that would continue to run it as an independent airline. |