Star Alliance member BMI Group has significantly hiked its net asset value by booking £770 million ($1.5 billion) against its London Heathrow slot holding on its balance sheet.
BMI holds 11% of Heathrow’s scarce slot pool, second only to British Airways’ 41%. In the wake of the 2007 US-EU ‘open skies’ deal BMI says the number of slot trade transactions has increased significantly, prompting it to value and book its portfolio.
Speaking after the release of the group’s 2007 financial results, BMI chief financial officer Robert Palmer says: “This increase in slot trading has led the directors to conclude that the conditions now exist to include a value of £770 million on the balance sheet in respect of the London Heathrow slots operated by BMI.
“As a result, net assets at 31 December 2007 were £800 million, compared to £12 million at 31 December 2006. This is a much better reflection on the net asset value of BMI.”
Earlier this month financial services firm Deloitte & Touche proposed that airlines should include slots as assets on their balance sheets, enabling them to be used as security against borrowings. In its analysis Deloitte valued a peak-time Heathrow slot at around £25-30 million.
The slot valuation move comes as the market keenly awaits news of the future ownership BMI - and its envied slot pool – which is likely to reach a head by mid-2009.
BMI chairman Sir Michael Bishop, who owns 50% plus one share, and 30% shareholder Lufthansa have a set of buy and sell options in place which expire by June 2009. Minority shareholder SAS is also looking to sell its 20% stake.
Source: Air Transport Intelligence news