I've keenly followed bmi for many years. You seem to forget that LH had a minority holding and seats on the board in bmi since 1999. The condition of bmi could have been absolutely no surprise to LH, but they absolutely did not want the airline at the time it was forced on them by Bishop, to the point of an out-of-court settlement.
''
experience with bmi would suggest they have little interest or appetite in this market''
As you say they had a
minority holding when Sir Michael Bishop was calling the shots, Lufthansa aren't going to have little interest in an airline which at that time were what the second largest slot carrier in LHR after the 2009 merger? It's a case of highly overpaid staff working no where near enough hours and a cost base which made them uncompetitive - And it hurts me to say that because the actual staff at bmi where some of the best in the industry. It takes time to turnaround that sort of airline which had lost £157m in the year before the merger with LH Group. And had estimated losses of an estimated £320m in just 3 years (by 2010). Also bmibaby was losing £25m a year and we weren't informed about how bmi regional was doing. If you compare with Aer Lingus, they are in the top 10 airline bracket when it comes to profitability, I believe they had margins of over 7% in 2010 and they've improved significantly financially-wise since then. They are also close to a deal on the pension problem which seems the last problem for them after the Ryanair shareholding which seems to be pretty much sorted.
My point is don't rule out airlines when you're comparing other mergers which are nowhere near alike.