Lufthansa to sell bmi to IAG

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Lufthansa to sell bmi to IAG

News Friday, 04 November 2011 12:33 Written by Dominic Welling

Lufthansa has announced its intention to sell loss-making British Midland (bmi) to International Airlines Group (IAG), the company that owns British Airways and Iberia.

IAG has reached an agreement in principle with Lufthansa for the sale of bmi with a deal likely to be completed in the first quarter of 2012, subject to due diligence and regulatory clearances.

With 9% of the take-off and landing slots at Heathrow, bmi is currently the second-largest carrier at the gateway, behind BA with 43.1% of slots.

Buying bmi offers IAG the opportunity to grow at Heathrow, which is currently operating at full capacity after plans to build a third runway were scrapped.

The acquisition would mean that IAG would have more than half of the landing slots at the UK's busiest airport.

Virgin Atlantic, which has also made a bid for bmi and has just 3.1% of slots at Heathrow, is likely to strongly oppose the deal on competition grounds.