http://news.bbc.co.uk/2/hi/business/7697261.stm

BMI being taken over by Lufthansa

BMI is Heathrow's second-biggest airline

UK airline BMI is being taken over by Germany's Lufthansa.

Lufthansa, which already owns a 30% stake in BMI minus one share, is
buying the 50% of the company owned by BMI chairman Sir Michael
Bishop.

The deal will give Lufthansa control of more flights from London
Heathrow airport than any other airline except British Airways.

The remaining 20% of BMI is currently owned by Sweden-based
Scandinavian Airlines (SAS).

BMI flew 10.6 million passengers last year and operates 54 aircraft.
It controls 11% of landing and take-off slots at Heathrow.

Lufthansa said it intended to complete the deal by 16 January. It has
not said how much it is paying for the 50% stake.

The German airline signed an agreement with Sir Michael back in 1989
that if he ever wanted to sell his BMI stake, it would have first
refusal.

Sector under pressure

There had been growing speculation in recent months that Sir Michael
was keen to sell his share in the business.

Lufthansa tailfins
Lufthansa is Germany's largest airline

Last month, BMI declined to comment on reports that it had been
approached by Abu Dhabi carrier Etihad over a possible merger.

Like almost all airlines, BMI has seen its profits hit this year by
the big rises in the price of aviation fuel in the first half of the
year.

This has led to a number of carriers seeking closer ties with rivals,
such as British Airways' plans for a tie-up with American Airlines.

Other airlines have had to cease operations, including Zoom, XL and
Sterling.


LUFTHANSA
83.1 million passengers last year
Flies to 209 destinations
276 planes

Analysts said Lufthansa's relative financial strength, combined with
the current troubles in the airline industry, meant it had been able
to go on something of a bargain-hunting spending spree.

Earlier this year, Lufthansa had bought a 45% stake in Brussels
Airlines.


BMI
10.6 million passengers last year
Flies to 51 destinations
54 planes

The BMI announcement came as Lufthansa announced a 75% fall in net
profit for the July to September period, which it blamed on higher
fuel costs.

However, aviation fuel is now falling in price as it trails the recent
sharp declines in crude oil costs.

BMI's two main hubs are Heathrow and Manchester, but it also operates
from 13 other UK airports.