Despite the fact that Bmi is owned by Lufthansa group, would LH not consider looking to strike a deal with BA to brand bmi BA as a franchise? At the same time work on cutting costs.
The benefits to bmi/LH are greater level of interlining traffic at LHR, less reliance on point to point traffic, improved fortunes at the airline, potentially remove challenges of duplication of routes,
Would give BA broader level of markets to feed into, bmi feed into BAs network. The down side for LH is that they would be assisting a large competitor to some extent. But all the while increasing the value of bmi and it's network. Wouldnt be in the interest of Star Alliance but in it's current guise bmi wont have long term position in any alliance if things keep going as they are now.
EI-BUD