Scandinavian Airlines to sell bmi 20%.

Scandinavian Airlines will sell its 20% stake in bmi to reduce costs and lift profits. Lufthansa is believed to be the only buyer interested. If Lufthansa were to buy SAS's holding it would mark a big step towards the German carrier gaining a stronghold at London's Heathrow airport. The German national airline already owns almost 30% of BMI and, from December, has the option to buy shares from BMI chairman Sir Michael Bishop, who currently has a controlling stake in the group. Therefore, Lufthansa could potentially own BMI by next year.

As BMI holds 12% of take-off and landing slots at Heathrow, this would be a very appealing prospect. It would mean Lufthansa would dramatically increase its market share to become the second-biggest airline after British Airways at Heathrow, just as transatlantic air travel is liberalised next spring.

However as Lufthansa have shown with other airlines they own, such as Austrian and Swiss, they would convert the bmi Frequent Flyer scheme (called Diamond Club) into it's own Miles&More system. Frequent Flyers would loose considerable benefits.

bmi are clearly much more concerned in finding suitable Airbus A330 aircraft. After a 25 year battle to obtain traffic rights from Heathrow to the United States the airline finds itself struggling to find suitable equipment in which to introduce new services. At the recent IATA conference in Vancouver chief executive Nigel Turner was confident that aircraft will be found. "We have three A330s on line," he said. "I am positive that we will be ready to expand our long haul Heathrow operation next spring".