Lufthansa Able to Acquire Remaining BMI Shares

Lufthansa has reported that it was able to acquire the remaining 20 percent of BMI, ahead of the big sell off. This has just fueled speculation that Lufthansa could be trying to sell the airline. It appears that Lufthansa was able to pay £19 million to SAS for their remaining stakes in the carrier. They had to pay another £19 million to cancel a shareholder agreement with BMI.

The German carry will also have to pay an additional undisclosed amount to SAS Airlines should Lufthansa choose to sell BMI within the next two years. Right now there are already 12 parties that are interested in BMI. The chief executive of British Airways, Willie Walsh, said that he is interested in the airline, but no kind of formal talks have been held.

Flybe has already emerged as a potential runner in the race for BMI. Some have been led to believe that Flybe may make a joint bid with British Airways; however, all talks have been denied. Experts have pointed out that British Airways may not be able to be a sole bidder for BMI due to its dominate share at Heathrow. A duel bid between British Airways and Flybe would actually sidestep the competition watchdogs.

Lufthansa said back in June that BMI was faced with growing financial challenges due to fuel prices and a big fall in demand. This was all due to the economic crisis. In fact, this month the International Air Transport Association expects the world’s airlines to lose about $11 billion this year. This shows that the problems were not just limited to BMI, but many airlines were faced with problems.