Lufthansa to increase stake in BMI to 80%

CaptainSkidmark

Germany’s flagship airline Lufthansa was today set to take control of a UK carrier for the first time after agreeing to buy a majority stake in British Midland in a deal costing £223m (€263m).

BMI owns about 11% of take-off and landing slots at Heathrow and Lufthansa’s move gives it access to the lucrative berths at Europe’s biggest airport.

Lufthansa already owned a stake of just under 30% in BMI but the deal was made possible by an out-of-court settlement with BMI’s majority shareholder Michael Bishop.

When the airline first became a shareholder in BMI in 1999, it agreed an option with Bishop to buy his stake – reportedly for about £300m (€350m).

Sir Michael enforced the buy-out option last year but valuations in the airline industry have slumped and BMI sank to losses of almost £100m (€118m) last year.

After months of wrangling over the price, he has agreed to cancel the option in return for a £175m (€207m) payment.

Lufthansa will now pay a further £48m (€56.7m) on top of this for Bishops’s stake, taking its ownership up to 80% when the firm has completed traffic rights negotiations with the countries to which BMI flies.

Bishop said: “I am pleased that we have settled this dispute. Our agreement resolves the uncertainty over the ownership of bmi, which should be of considerable benefit to the company and its 4,500 employees.”

Lufthansa said it was expanding its interests in an airline with important strategic assets.

“In recent years, however, BMI has experienced increasing financial challenges. These have been strongly exacerbated by the sharp rise in fuel prices in the past year and the ongoing global economic crisis,” the German firm added.

Across its full mainline and regional network, BMI operates about 1,800 flights a week.

It flies to locations including Antigua, Baku, Cairo, Las Vegas and Tel Aviv as well as UK regional airports such as Norwich, Glasgow, Manchester and Belfast.

BMI began life in 1938 as Air Schools Ltd, specialising in RAF pilot training. In 1959 the company became known as Derby Airways, but changed to British Midland Airways in 1964 when it moved to the newly opened East Midlands Airport in 1965.

Read more: http://www.breakingnews.ie/business/...xzz0JB6ogxc4&C

mikom

CaptainSkidmark wrote: »

Lufthansa to increase steak in BMI to 80%

The price of beef is gonna soar.

OPENROAD

Have been following this now for some time, ah well looks like the dispute has been resolved

Interesting few months ahead now and only a matter of time before the introduction of Miles and More , will be interesting to see what changes if any we will have on Dub-Lhr.

FlutterinBantam

Striploin medium rare for me.

Max Power1

good to see they've decided to impove the quality of airline food then!

Fratton Fred

OPENROAD wrote: »

Have been following this now for some time, ah well looks like the dispute has been resolved

Interesting few months ahead now and only a matter of time before the introduction of Miles and More , will be interesting to see what changes if any we will have on Dub-Lhr.

hopefully it will bring the prices down, they have gone through the roof of late.

I heard a rumour that BMI are going to bin their business class cabin on this route, shame if true.

OPENROAD

Fratton Fred wrote: »

hopefully it will bring the prices down, they have gone through the roof of late.

I heard a rumour that BMI are going to bin their business class cabin on this route, shame if true.

Would be a shame if they do, though with different economic circumstances here now, wouldn't surprise me, as long as they keep the lounge open here I'm happy. It will be intersting to see how quickly they introduce Miles and More.

therecklessone

Here, have either of you heard of BMI doing Diamond Club promotions where they upgrade members to Gold Status? I've about 2500 miles earned since I signed up recently and got a "3 month gold card" in the post a week ago, with the upgrade vouchers and all.

OPENROAD

therecklessone wrote: »

Here, have either of you heard of BMI doing Diamond Club promotions where they upgrade members to Gold Status? I've about 2500 miles earned since I signed up recently and got a "3 month gold card" in the post a week ago, with the upgrade vouchers and all.

How did you manage to get a gold card :eek:


Am afraid no chance of getting upgrade to Gold. Silver membership which gives lounge access and gives the odd upgrade on Dub-Lhr flight if the flight is full requires 16,000 miles.Gold requires a lot more but once you reach it the miles required to retain it are much lower, I think it is 38,000 miles.

therecklessone

OPENROAD wrote: »

How did you manage to get a gold card :eek:


Am afraid no chance of getting upgrade to Gold. Silver membership which gives lounge access and gives the odd upgrade on Dub-Lhr flight if the flight is full requires 16,000 miles.Gold requires a lot more but once you reach it the miles required to retain it are much lower, I think it is 38,000 miles.

Just came in the post! No sign of any promotion on the website, no e-mail explaining it, just got the pack in the post with a card running up to Nov 2009.

I was surprised

OPENROAD

therecklessone wrote: »

Just came in the post! No sign of any promotion on the website, no e-mail explaining it, just got the pack in the post with a card running up to Nov 2009.

I was surprised

Have you been a Gold card holder before? Can't see how they would give you a Gold card on the back of 2,500 miles, if they have wow, well done, did they include the upgrade vouchers?

Fratton Fred

you need 3000 miles to get Blue Plus membership, although they quite often give that as a joining bonus. if you got a gold card straight away, all i can say is you jammy bastard

therecklessone

OPENROAD wrote: »

did they include the upgrade vouchers?

Yep, four upgrades plus the Hertz upgrades as well.

I'm afraid to ask in case they realise their mistake