bmi reveals approaches from struggling airlines
26.04.08
Several airlines struggling to cope with the record oil price have approached bmi to sound out whether the carrier would be interested in buying them, its chairman Sir Michael Bishop said this week. The news comes as Germany's Lufthansa said that it intends to acquire a majority stake in the airline.
After a speech in which he predicted the slowing economy and the record price of fuel was leading to a clear division of airlines into the ‘haves and have-nots,’ he said 'they have already started coming to us.'
He said that those able to withstand the difficult conditions would be determined largely by their fuel hedging positions (bmi has hedged 75% of its fuel for this year). He also said that start-up carriers and those with insufficient scale to withstand the hike in operating costs are likely to be the most vulnerable.
The approaches bmi has received have thus far been informal, Sir Michael said, but he added he is keen to expand the airline through ‘bolt-on acquisitions’.
If we were betting on those who had approached bmi, our money would be on Silverjet (whom we know are looking for a backer), Jet2 (who issued a profit warning recently) and Flyglobespan (who said that they could merge or be taken over recently).
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