Who wants to buy a Lufthansa subsidiary?

British Airways and Qatar Airways among potential buyers of bmi

Lufthansa Group’s revelation that it is considering selling its loss-making subsidiary bmi or creating a new partnership has prompted speculation as to who might buy it. Following a €145 million loss in 2010, bmi sustained a €63 million operating loss in Q1 2011, mainly due to its emphasis on a network connecting a weak UK market with the Middle East. LH wants to find a solution quickly and there is speculation that cash raised from a sale could be used to buy the remaining 55% of Brussels Airlines or to buy the Portuguese flag carrier TAP.
Unluckily, bmi has suffered terrible losses since Lufthansa bought it in 2007 – cumulative losses of €640 million from January 2008 to June 2011. But it has one great asset – its portfolio of slots at London Heathrow, an 8% share of all aircraft movements. That compares to British Airways’ 43% and Lufthansa’s own 5.5%.
Besides the possibility of a link-up between bmi and Virgin Atlantic, a rich airline such as Qatar Airways may also take the opportunity of expanding by buying bmi and its slots. And Lufthansa may find the idea of selling to a non-alliance carrier like this far more favourable than selling to, for example, British Airways.
[pictured: bmi Airbus A320-200]