IAG may get £80 million discount on BMI sale

International Airlines Group could get a discount as high as £80 million amid its buyout of ailing airline BMI.

Travel Insurance News - 19/04/2012

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Reports said on Wednesday that BMI owners Lufthansa saw a substantial setback in the pending sale of BMI subsidiary BMIbaby. Sources now say that both firms that were looking into buying the carrier – Dublin-based ACL and German firm Intro Aviation – are no longer interested.

Experts say this will trigger a previously negotiated clause in the contract to buy BMI proper by British Airways’ parent firm IAG, which will mean a significant price discount from the £172.5 million agreement, which some City analysts say could amount to a figure as high as £80 million.

However, a spokesperson for BMI said to news reporters this week that the company was still engaging in negotiations with various parties in regards to the future of both BMI carriers. But experts say that finding a buyer for BMIbaby will continue to become increasingly difficult due to the current climate in the region’s aviation industry.

Analyst Douglas McNeil of Charles Stanley Securities described the airline as not being a “prime asset” and said it is becoming very hard to say who would be interested in “stumping up hard cash” for the carrier.

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