Deutsche Lufthansa AG, Europe's second-largest airline, agreed to buy the 20 percent stake in BMI it doesn't already own from SAS Group, paving the way for a possible sale of the UK carrier. Lufthansa will pay 19 million pounds ($30.3 million) for the holding in Castle Donington, England-based BMI and another 19 million pounds to cancel SAS's minority-owner rights under an earlier shareholder agreement, the airlines said today in separate statements. BMI Chairman Michael Bishop exercised an option last year forcing Lufthansa buy his 50 percent-plus-one-share stake in the UK airline, in which Lufthansa already held almost 30 percent. Lufthansa hasn't decided whether to keep or sell BMI, and is focusing on “restructuring” the unit, Claudia Lange, a spokeswoman in Frankfurt, said by telephone Thursday. “Lufthansa would rather just sell BMI,” said Chris Logan, a London-based analyst at Liberum, who recommends selling the Cologne, Germany-based airline's stock. “I'm not sure how many buyers for the whole business there are. They might get a lot of buyers focusing on the airline's slots.” BMI, the second-largest holder of takeoff and landing slots at London's Heathrow airport after British Airways Plc, operates flights to the Middle East and the US as well as within Europe. The closely held airline had a loss of 100 million pounds on sales 1.04 billion pounds in 2008, according to its Web site. British Airways Chief Executive Officer Willie Walsh said on Sept. 29 that he would like to buy BMI to increase his carrier's access at Heathrow. Virgin Atlantic Airways Ltd., the long-haul carrier owned by billionaire Richard Branson, said in July that it was also considering a tie-up with BMI. The buyout of BMI is taking place through LHBD Holding, in which Lufthansa has a 35 percent stake. Lufthansa said it plans to acquire 100 percent of LHBD after obtaining necessary traffic rights. – Agencies Lufthansa fell as much as 15 cents, or 1.2 percent, to 11.96 euros as of 10:46 A.M. in Frankfurt trading. The carrier has advanced 6.9 percent this year, boosting its market value to 5.5 billion euros ($8 billion). SAS declined as much as 1 percent to 4.90 kronor in Stockholm. SAS is selling units that aren't part of its main northern European network and completed the sale of its Spanair brand in March. The Stockholm-based carrier, which posted its seventh consecutive quarterly loss in the second quarter, is seeking to reach agreements with pilots and flight attendants to cut wages and pensions in an effort to survive the slump in travel caused by the global recession. “Under the current climate, it's really tough and every krona counts,” Sture Stoelen, an SAS spokesman, said today in an interview. “Mainly we're doing this because it's part of our strategy.”
