Lufthansa no longer looking to offload bmi

Lufthansa has withdrawn bmi from sale and will now focus on returning the airline to profit, according to The Times.

The newspaper reports that Germany's national carrier was disappointed with the bids bmi has so far attracted and no longer views offloading it as the best option.

It had been seeking a buyer for the airline after a longstanding agreement with former bmi chairman Sir Michael Bishop forced it to take over the company earlier this year.

Lufthansa acquired Sir Michael's 50 per cent stake plus one share for around £220 million, while also purchasing a 20 per cent stake from SAS.

After gaining full control of the airline, the German flag carrier opened up its books and launched closed-door negotiations with British Airways, Virgin Atlantic and Flybe – all of whom expressed interest in snapping up at least part of the ailing business.

The prospective bidders were said to be particularly interested in bmi's lucrative landing slots at Heathrow, which are valued at up to £30 million per pair.

But after months of negotiations, Lufthansa has discovered that it would need to sell the airline for about £500 million in order to both recover its investment and offset bmi's losses this year. The bids it has so far received reportedly fall well short of that mark.

Commenting on the decision to axe the sale, a source close to Lufthansa told The Times: "People have expected us to sell bmi because Virgin and BA have said they want to buy it.

"It would be stupid not to listen if someone wants to buy, but at this time we are not talking to anyone," the insider explained. "Lufthansa will focus on turning it around and perhaps when that is done bmi can be sold, or perhaps it will be so good that it will be kept."

Bmi posted losses of £100 million last year, and analysts have warned that it could ratchet up a deficit double that size over the course of the current financial year.

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