Germany's Lufthansa is to examine BMI's books in depth for the first time, to decide on future strategy, after agreeing to acquire a further 50% stake in the UK airline.
Lufthansa says it has been unable to carry out a full assessment of BMI's accounts while uncertainty continued over the future of the stake, currently held by BMI chairman Sir Michael Bishop's investment company BBW.
But it is set to consider a range of possible strategies which could include absorbing BMI as part of Lufthansa, splitting off specific operations - such as budget division BMIbaby - or selling the entire airline to a third party.
"We now have the chance to look at the books [and decide] which options we'll be following," says a spokesman for Lufthansa.
BBW initiated legal action in May to force Lufthansa to buy its 50% stake, under the terms of a historic pact between the two sides, after Lufthansa stalled and questioned BMI's financial position.
But an out-of-court settlement, disclosed today, effectively abandons this historic agreement in favour of an alternative mechanism by which Lufthansa will acquire the shareholding - giving the German airline an overall 80% stake in BMI.
Using a similar mechanism as that employed during its Swiss International Air Lines takeover, Lufthansa is acquiring the BMI shareholding through a UK-based vehicle, LHBD.
Lufthansa holds 35% of LHBD. It has not disclosed the identity of the majority shareholder, saying only that the balance is held by an entity "in favour of Lufthansa".
LHBD will be wholly acquired by Lufthansa once traffic rights for BMI have been secured.