Lufthansa agrees to sell British Midland

German airline Lufthansa said on Friday it has agreed in principle to sell its loss-making unit British Midland to the International Airlines Group, the holding company of British Airways.

Lufthansa agrees to sell British Midland

“Deutsche Lufthansa AG and International Consolidated Airlines Group have reached an agreement in principle on the sale of British Midland to IAG,” the German carrier said in a statement.

“It is envisaged that the purchase agreement will be signed in the coming weeks,” said Lufthansa’s director of investor relations Frank Hülsmann in a telephone news conference.

“The aim is for the transaction to be completed in the first quarter of 2012,” he added.

In the meantime, the two sides had to hammer out the precise details of the sale, including price. IAG would have to examine BMI’s accounts and the deal will be subject to the approval of the regulatory authorities.

“We have already approached the EU Commission,” Hülsmann said. Media reports said Virgin Atlantic had also been interested in buying British Midland (BMI) because of its attractive slots – take-off and landing rights – at London’s Heathrow airport.

But Hülsmann declined to comment, saying only that “during the negotiations, it was IAG that offered the better perspectives, both from BMI’s and Lufthansa’s point of view.”

IAG would acquire all of BMI, including the slots, Hülsmann said. Lufthansa acquired the British airline in 2009, but the recent crises and conflicts in the key regions of North Africa and the Middle East prevented the German carrier from steering the unit back into profit.

In the first nine months of this year, BMI flew in an operating loss of €154 million ($212 million), compared with a loss of €90 million a year earlier.

Together, BMI and British Airways would hold 51 percent of slots at Heathrow, according to the business daily Handelsblatt.

Analysts put BMI’s estimated value at £400 million (€463 million), the newspaper added.

In London, IAG, which comprises British Airways and Iberia, said high fuel costs caused after-tax profits to decline to €267 million ($368 million) in the three months to September, from €362 million a year earlier.

In Frankfurt, Lufthansa shares were showing a loss of 0.77 percent, while the overall market was down only 0.30 percent.


Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Emergency numbers fail in several German states

Callers to the emergency numbers 110 and 112 weren’t able to reach operators Thursday morning in several German states.

The 112 emergency number on an ambulance.
The 112 emergency number on an ambulance. Photo: picture alliance/dpa | Boris Roessler

The emergency number 110 for police and 112 for fire crews failed around the country early Thursday morning, with callers unable to reach emergency operators for urgent assistance between about 4:30 am and 5:40 am local time.

The Office for Civil Protection and Disaster Aid is looking into these outages, which were reported in states including Lower Saxony, Baden-Württemberg, and  Brandenburg, and in major cities like Berlin, Cologne, Hamburg, and Frankfurt. Cologne was further affected by cuts to electricity, drinking water, and regular telephone services. Lower Saxony also saw disruptions to the internal phone networks of police and hospitals.

Emergency services are not reporting any more disturbances and people should be able to once again reach 110 and 112 around the country as normal.

Investigators are looking into the problem, but haven’t yet established a cause or any consequences that may have happened due to the outage. Provider Deutsche Telekom says they have ruled out the possibility of an attack by hackers.