Lufthansa will take over BMI in the New Year after agreeing to buy chairman Sir Michael Bishop’s controlling share in the airline.
The German carrier already owns 30% of BMI and will exercise an option to buy Bishop’s 50%-plus-one-share stake agreed when it bought into the airline in 1999. SAS Scandinavian Airlines owns the remaining 20% stake, which it is expected to sell to Lufthansa.
BMI is the second-biggest carrier at Heathrow and the deal will give Lufthansa considerable scope to challenge British Airways at Europe’s busiest airport.
The deal is believed to be worth Euro400 million, although details have not been released. It will not be completed before January 12 and is subject to regulatory approval. In a statement to investors, Lufthansa said: “Discussions regarding the future structure and options are ongoing.”
BMI formerly operated as regional carrier British Midland, with Sir Michael Bishop part of a buy-out by directors in 1978. The airline was subsequently transformed into an international carrier based at Heathrow and Manchester. It is a member of the Star Alliance group of carriers alongside Lufthansa and operates a fleet of 54 aircraft. BMI flew 10.6 million passengers last year, flying from 13 UK airports.
Its takeover is the latest in a series by Lufthansa, which already owns Swiss International Airlines, has a 45% stake in SN Brussels and has bid to take over Austrian Airlines. Lufthansa reported a Euro984 million operating profit for the year to September and stated its intention to operate “a modular system of essentially independent airlines with their own specific markets”.
No one from BMI was available to comment.