According to various reports coming out of Europe. Lufthansa has indicated that it is willing to shut down BMI if the sale of the British carrier to IAG (parent of British Airways and Iberia) is blocked by EU regulators.
Lufthansa is concerned about ongoing losses being incurred while the sale hangs in limbo, and any additional delays in the EU’s approval process will only extend the losses to Lufthansa.
I suspect Lufthansa is using this position as leverage to “help” the EU regulators approve the sale. Otherwise, the shutting down of BMI would lead to widespread job loss which is in no one’s best interest.
I Wonder if this opens the door to Virgin Atlantic coming back with a proposal that is less “anti-competitive”……a boy can dream can’t he??
Here is the Marketwatch.com article sourced from The Times (London)
LONDON (MarketWatch) — Lufthansa AG is considering shutting down its loss-making British Midland Ltd. – known as BMI – if its sale to International Consolidated Airlines Group (IAG.LN) is held up by anti-trust authorities in Brussels, the Sunday Times reports citing unidentified sources.
The German airline agreed in December to sell BMI to IAG, the parent company of British Airways and Iberia, for a maximum GBP172.5 million. But the deal could be held up following Brussels’ rejection last week of concessions offered by IAG, which the competition regulator said were inadequate, the paper says.
Lufthansa wants to avoid continuing losses at the carrier which would result from a protracted investigation, it adds.
A representative for Lufthansa said that the company’s position was unchanged.
“We are aiming for regulatory approval in Phase 1 and are on track with the deal process,” he said.
Reporting annual earnings Thursday, the German carrier attributed its poor performance partly to losses at BMI and said that the sale will bolster its earnings performance, which should enable Lufthansa to post a net profit this in 2012 after the EUR13 million net loss in 2011.