Lufthansa looks to buy majority stake in BMI

Lufthansa is said to be “determined” to gain control of British Midland (BMI), by buying a majority of shares in the Britain’s second largest ‘legacy’ airline. Stephan Gemkow, the German flag carrier’s chief financial officer, made the announcement earlier today. According to a report in Forbes magazine, Lufthansa has an “option” which will allow it to buy a larger chunk of BMI. Lufthansa, however, already controls 30 percent of the British carrier, while Sir Michael Bishop, the company’s CEO, owns 50 percent plus one, giving him a controlling stake in the company. An additional 20 percent of shares are controlled by Scandinavian Airlines (SAS).

According to media reports, Sir Bishop looks likely to sell his stake in the airline, and probably before the end of the year. According to a legal arrangement between BMI and Lufthansa, the German flag carrier has an option to buy these shares, anytime between December 2008 and June 2009.

British Midland was founded in 1947 and the carrier currently operates a fleet of 50 airplanes, while flying to 51 destinations. On all of its domestic and short-haul European routes, BMI essentially operates using the low-cost model, which means that passengers receive discounted tickets, but no complimentary meal and snack service on these flights.

www.lufthansa.com