Bmi future up in air on eve of takeover
A spokesman for the German rival carrier, which takes control of the Castle Donington company tomorrow, today said "anything is possible" – including selling the business in its entirety.
Questions have been hanging over the future of the company since its chairman and owner Sir Michael Bishop enforced a previously agreed buy-out of his stake by Lufthansa last year.
It marks the end of a relationship lasting more than 40 years between the airline and Sir Michael, who last week agreed the sale of his 50% plus one share in a cut-price £223m deal.
From tomorrow, the firm will see all its books opened up for the first time to Lufthansa.
This is expected to lay bare the airline's increasing difficulties due to rising fuel prices and the effects of the global economic crisis.
Lufthansa said it would take its time poring over the details before deciding what to do with the business, which employs about 1,200 people at its Donington Hall head office and East Midlands Airport.
The Lufthansa spokesman said it had not ruled out going on to sell off Bmi entirely, or selling off parts, such as beleaguered low-cost arm, Bmibaby.
He said: "For the first time we are now in a position to look at all of Bmi's books.
"No decisions have been made. We need to see how everything is performing and what makes sense. We are looking at all options."
He said the business would not dismiss approaches from parties interested in taking over the airline, which holds 11% of the valuable take-off and landing slots at Heathrow.
Last year, Richard Branson's Virgin Atlantic confirmed it held talks with Lufthansa about a deal which could see it take control of Bmi's long-haul business.
The spokesman said: "Those who are interested can approach us. It's not been ruled out that we could sell all of Bmi."
Lufthansa agreed an option with Sir Michael, who was appointed managing director of Bmi in 1972 and chairman in 1978, to buy his stake for about £300m 10 years ago.
Sir Michael enforced the buy-out option last year, but valuations in the airline industry have slumped and Bmi sank to losses of almost £100m last year.
Last week, he reached an out-of-court settlement with Lufthansa after a row over extra funding for the business.
Lufthansa has refused to comment on whether Bmi's headquarters would remain at Donington Hall.
Dr Lucy Budd, a lecturer in transport studies at Loughborough University, said she would be "surprised" if the Bmi brand was lost in the next few years.
She said one option open to Lufthansa, if it did not sell the business, would be to move its operations from Donington to London, or even Frankfurt.
But she said such a move, if it happened, would be years off.
She said: "It's quite possible that they will want to consolidate their operations and the operations side (of Bmi) could go to London or to Frankfurt."
But she said: "I would be surprised if things changed in the next year or so.
"(Bmi) has got a high level of brand recognition and customer loyalty.
"I would say that for the people who work there, in the short to medium-term, (the takeover) is good news for them.
"The difficulty is that at this time, all we can do is speculate."
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