British Midland may be pondering merger

Heathrow-based British Midland (BMI) is contemplating a potential merger with Etihad, a carrier based in Abu Dhabi, according to a string of media reports. The fact that BMI has refused to offer any comment at all on these rumours means that speculation is continuing both online and in paper publications. Since fully 30 percent of BMI’s shares are controlled by Lufthansa, the German flag carrier, there are reports that Etihad has already contacted this company and presented its business proposal.

When pressed, Etihad remained fairly tight-lipped about this news, but it said more than BMI. The Abu Dhabi-based airline merely stated that it was engaged in a “number of discussions with a variety of carriers,” but official negotiations have yet to take place.

British Midland is the second most prominent carrier at London’s Heathrow Airport, after British Airways. The firm has built a reputation for offering low-cost tickets on all domestic and European routes, coupled with no-frills service. On long-haul intercontinental flights, however, BMI still offers full service. High oil prices have hit BMI quite hard and this is one reason why mergers are being considered. There has also been talk that a majority of BMI shares may soon be up for sale.

Thank you to BBC for the initial report.

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