Just curious, but how big does LH have to grow before someone in Brussels begins to take an interest ?

Before the end of the year, it's quite possible that in a very short space of time they will have acquired the national carriers of Switzerland / Belgium / Austria / Norway / Sweden / Denmark....acquired the #2 UK carrier....and made some sort of cosy relationship with the #3 UK carrier....

Seems there are far too many markets there where they will have a complete monopoly or significantly more than 50% of available capacity...

Anti-Competitive ? Must be pretty close by now....

Meanwhile Brussels investigates to death the AZ and OA survival plans but ignores the fact that OS will be allowed to write-off about €700 million owed to the Austrian Government

And as for Big Airways....Well, while all this was going on around them ( and in their own backyard !!! ) they are proposing a merger with an airline that is big in the Europe > South America market and pretty much nowhere else....A ' last-chance shot' at a tie-up with an American carrier forecasting losses of over $700 million in Fiscal 2008 and which is not guaranteed to get the go-ahead from both the EU and the US authorities....£30 million plus spent on a four aircraft / business class only / French based airline with a future as certain as a pig in a sausage factory just as the bottom falls out of the business class market....And make a huge story out of proposals to operate business class only service London City > New York just a few weeks before half the fat bankers in London City are ( rightfully ) shown the exit door...

Seems if your LH you get what you want....If you're BA you get what you deserve...

Panther,

Sadly I don't think that will happen. Lufthansa stocks are trading slightly down, not what you'd expect after an announcement like this. Currently running at 5 cents down on the opening.

Lufthansa are really stretching themselves at the moment and the requirement to buy up the BMI stock could be the breaking straw. What will the future bring? Investment? Possibly not. Turn around and sell on? Possibility.

The BMI slots at LHR are not that good for Long Haul east or west given their timings. Want to depart New York at 4 in the morning to get to London for your slot at 12 noon into LHR? Don't forget that the slots into and out of LHR are the over riding factors for departure times. Never accuse the BAA of tail wagging the dog. :ugh:

I don't know whether to applaud Bishop:D:D or send in the hit squad.:ugh::ugh:
Another uk business sold but the real prize is LHR. Something i feel has been planned for years.

With Lufthansa having a stake in German Wings perhaps BMI Baby will be combinec to form a European lo-cost operator

When the Alliance Agreement was signed between Weber and SMB back in 1997/8, there were defined call and put options agreed for both sides at defined times at an defined price.

Plus some other stuff - IT platform, MRO etc

It's not coming as a surprise to anyone involved and LH will have long term planning in place for the financial issues.

Won't stretch them either - they've got the lowest leverage ratio of any of the majors and one of the lowest worldwide.

Just watch LH turn the UK into their aircraft carrier using bmi as a proxy - that was the original intention and it's what they've been waiting 10 years to do...

bmi/lufthansa and virgin?
 

so the bearded one now decides lufthansa want to join HIM?/they are a very savvy company and know what they want/doesnt want ba to join iberia but hes happy to join lh/fox and grapes comes to mind

VS "offer" sounds like panic. Why would LH want to tie-up with Sir Dickie Jumper? They've got plenty of slots for their own Longhaul op out of LHR (especially when SAS is gobbled up) and can now have directional hub and spoke traffic i.e. going east then you transfer at MUC/FRA...going west then you go through LHR.

Times have just got interesting for the jumper and the leprechaun :E:E:E

How do you work that one out? Going off the current schedules bmi look to have around 4-6 arrival slots every hour from 7am until late evening, and even more departure slots first thing in the morning (8-9 per hour). Just because they are used for shorthaul flights at the moment doesn't mean they will always be so used. Plus LH's existing slots of course.....

It's not over yet and I don't reckon it will be until the Spring. Some questions:

Why, when BMI bought BMed and promptly sold their LHR slots straight back to BA for exactly what they paid for BMed, did no-one make a fuss - particularly LH?

Which company are LHR slots most valuable to?

What would really kick it off would be LH executives having been spotted in Waterworld a few months ago but that would start to make it a conspiracy.:E

LH could make a tidy profit out of BMI if they really wanted to.

All IMHO, of course.;)

If one has 50% plus 1 share, one can do as one likes.....

There's a customer:client relationship between BA and LH, LH being the supplier of all sorts of services.

Just regular client review sessions, I'd say.

Curious Pax,

Quite right, however the trick is to tie up the long haul destination departure/arrival slots with those at Heathrow taking into account flow restrictions.

Not all slots are equal unfortunately.

If only life were so easy. :{

Rev Man, when the Bmed takeover was handled LH had 30% and Bishop had the trump hand. It seems he still has and is forcing LH to buy the stock. LH trading down.

RevMan,

I never said they were actually there.;)

The point I'm making is that if Lufthansa are so concerned about the possession of slots at LHR, their percentage of BMI gave them an awful lot of influence, albeit not a casting vote at the time of the BMed deal. I'm convinced that they would not have agreed to the sale of valuable slots at the home base of their largest competitor to their largest competitor if they had any intention of operating from there themselves.

As someone else has written, slots at the right time at LHR are a very valuable commodity. Those who have them won't want to get rid of them. BMI has 11% but very few suit sensible longhaul schedules. I doubt LH would want to do shorthaul in any quantity from LHR (perhaps a few extra services to connect at FRA, say) so the only companies to whom these slots have any value are those who have large numbers of them at LHR already and have the flexibility within their operation (ie. a large enough one) to move shorthaul and longhaul services around within their schedule. Needless to say, this narrows the choice down a bit. The only other operator who could perhaps have use of them is VS but unless LH buy them as well (who knows?), they aren't in a position to keep them (use them or lose them).

Like I say, just a few thoughts and whether I'm right or wrong, it'll be interesting to see how this plays. Watch this space.

As a casual observer, why does it seem that most people want to see BA, and VA for that matter, screwed. I would hope that those in the UK would want success for UK airlines?

rogerg,

Succinctly said and I agree, unfortunately welcome to PPRUNE home of the doom sayers. Support is not a dirty word. :)

Many people are suggesting that BA are stuffed by this take-over. Quite the opposite.......
With one swipe Lufthansa have helped BA and American to 'merge'. With Lufthansa/Star Alliance having such a dominant postition at LHR now, they have played right into Willy Walsh's hands.
The only person left totally in the cold is Richard Branson. It is amazing that SQ haven't dumped him as such a liability.

I was under the impression they are trying.

HF
To answer but one of your questions:
BMed was bought for £30M by bmi and the slots sold to BA for £32M. £2M profit!
However the slots are tied to bmi for up to two years before they HAVE to be returned.
Not a bad deal for SMB - and it looks as though he has done another one today - exactly a year after BMed was wound up!

HWB

It seems to me tha Lufty agreed this deal when the times were a great deal rosier than they are at the moment. Correct?

It also seems to me that todays deal was initiated by Sir Michael. ie it was more a case of him wanting 'out' as opposed to LH wanting 'in'. Still correct???

IF this is a deal that Lufty 'have' to do, rather than 'want' to do- well, hey! a deals a deal and LH would never welch on it but what will they do with BMI?

I mean, are they really into it in a big way- or are they justgoing to asset strip it to death in the hope of a quick buck and just keep the juicy bits for themselves- as they now have every right to?

Ruthless things, airlines.:uhoh:

Human Factor, AFAIK under the terms of the BMed Franchise, BA had the right to veto any takeover. Their condition for not vetoing the bmi takeover of bmi was the right to purchase the slots held by BMed.
As for Baby, there was informed speculation during the summer of an MBO...