Lufthansa appoints MS for possible BMI sale

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Lufthansa has engaged Morgan Stanley to look into a potential sale of its loss-making subsidiary British Midland International.

Sources close to the negotiations confirmed to ATI and Flightglobal that the German carrier has appointed the New York-headquartered financial services firm as an advisor regarding BMI.

Lufthansa had previously only said that it was open to "any option" to resolve the poor financial performance of the UK airline. These options include a partial or outright sale, finding a partner or returning BMI to profitability under the current ownership status.

Indicating an arrangement with financial advisors, the German airline stated today that it is "generally open for outside support".

The carrier declined to comment on the timescale for a possible sale.

Sources close to the airline said that while any deal would depend on the market feedback from potential buyers, Lufthansa is interested in finding a solution sooner rather than later.

Last week, BMI appointed Vagn Ove Sørensen, the former deputy chief executive of Scandinavian Airlines (SAS), to succeed Lufthansa executive Stephan Lauer as director board chairman. Sørensen's "experience with corporate restructuring is of particular importance and value to the company in this crucial period", Lauer said then.

Due to its numerous routes to Middle Eastern destinations, BMI has been significantly affected by the political upheaval across the region. Revenue seat kilometres in August fell 9% compared with the same month last year.

A key asset for BMI is that it holds about 10% of London Heathrow's highly sought-after slots.