IAG Mulls BMI Move as Lufthansa Kicks Off Sale

IAG Mulls BMI Move as Lufthansa Kicks Off Sale

International Airlines Group, formed by the merger of British Airways and Iberia, is still interested in buying its smaller rival bmi from German carrier Lufthansa to take advantage of its valuable take off and landing slots at London's Heathrow airport.

"We have made no secret of our interest in bmi's Heathrow slots," an IAG spokeswoman told reporters on Monday. "Lufthansa said a few weeks ago that they were looking at their options regarding bmi so the ball is firmly in Lufthansa's court, but there's nothing imminent happening from our side."

A source familiar with the matter said on Sunday Lufthansa had mandated banks to sound out a potential sale of loss-making bmi, though the process was at an early stage.

Bmi controls about 11 percent of the take-off and landing slots at Heathrow, making it second there only to British Airways, which has around 42 percent of the slots. Bmi's slots were valued at GBP£616 million (USD$977 million) at the end of 2008, down from GBP£770 million a year earlier.

A source close to the transaction said selling bmi would be a "mammoth task" for Lufthansa because there was no obvious buyer for the airline.

The source also said completion of any sale was unlikely until next year, but that Lufthansa's priority was to sell bmi as a whole, including the slots. The UK carrier will be sold in parts if Lufthansa does not find a full buyer, added the source.