Lufthansa eyes more airline stakes

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Lufthansa is continuing its leading role in the current wave of European airline consolidations after being selected as the preferred partner for a stake in Austrian Airlines and preparing to take a controlling stake in UK carrier bmi.

The Star Alliance carrier, which already owns Swiss International Air Lines and this year agreed a deal to buy Brussels Airlines, has been chosen to enter final negotiations for the Austrian state holding company's 42% stake in Austrian Airlines.

As part of the talks Lufthansa is looking to split the burden of ­Austrian's historical net debt of around ?900 million ($1.16 billion) with the state. Russia's S7 Airlines and Air France-KLM had also been in the running.

Separately, bmi chairman Sir Michael Bishop has exercised a put option with Lufthansa for his 50% plus one share in the carrier. The deal, set for completion in January, will increase Lufthansa's ownership of bmi to 80% and make it the second largest holder of slots at London Heathrow.

Lufthansa has also agreed to acquire an additional 50.9% share in Dortmund-based regional operator Eurowings, giving it 100% control of the carrier.

But there appears no immediate prospect of it taking a stake in SAS Group as sources indicate the carrier has ended talks on taking part in the Scandinavian carrier's restructuring. It does though remain in the frame as a possible partner for a new-look Alitalia.

Moves to relaunch the cash-strapped Italian carrier as a new operation under the ownership of Italian entrepreneur group Compagnia Aerea Italiana moved forward after a ?1.05 billion price was agreed with the administrator for Alitalia's assets.

The revamped Italian operation, which includes current Lufthansa partner Air One, is set to launch shortly. CAI then hopes to rapidly secure an international strategic partner - it has been courting Lufthansa and Air France-KLM - which would take a stake of between 10-20% in the new company.

Lufthansa remains in the frame as a possible partner for a new look Alitalia