BA "in talks to buy bmi"

Airline dismisses report as "speculation" 

BA has dismissed a report that it is in talks with Lufthansa to buy bmi.

It said it had "absolutely no comment to make whatsoever."

Bmi, which was taken over by Lufthansa in the summer, said the report in a UK national newspaper was "just speculation."

Lufthansa also said it had no comment.

BA also declined to comment on the claim by the Sunday Times that its chairman Martin Broughton flew to Germany last week for talks with Lufthansa on a possible sale.

The British carrier is currently in protracted talks over a merger with Spanish airline Iberia.

It is also awaiting a ruling from the US Department of Transportation over its application with fellow oneworld members American Airlines and Iberia for anti-trust immunity (ATI) to start a joint transatlantic venture.

BA has reportedly been eyeing bmi since its then owner Sir Michael bishop indicated his wish to sell his 50% plus one share holding to Lufthansa.

Bmi, while currently losing money, has 12% of the slots at Heathrow, against about 40% held by BA.

Willie Walsh, BA's ceo, told investors in New York in May the slots at the UK airport were too tempting to ignore despite BA's currently weak financial position.

"In the current environment, it is difficult to argue we should go out and acquire those slots," the Financial Times reported.

"Having said that, it may be the only opportunity we ever get."

Virgin Atlantic, which has 3% of the Heathrow slots, has also expressed an interest in buying bmi in the past.

Steve Ridgway, Virgin Atlantic's ceo, said last October that a tie up with bmi would be a "very compelling opportunity" to make his airline a stronger competitor to BA at Heathrow.

Virgin, which has regularly spoken against any grant of ATI to the oneworld members, said of the latest report: "BA want to merge with Iberia, American Airlines and now bmi. They are trying to gain more slots (at Heathrow), wipe out rivals and become a pure monopoly."

Lufthansa paid Sir Michael a total of £223m to take over his control of bmi.

The German carrier, through a newly formed company LHBD now owns 80% plus one share of bmi. The rest is owned by SAS which has indicated its wish to sell.

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