Lufthansa Has Reached an Agreement to Sell BMI to IAG (The Parent of British Airways and Iberia).

bd-baFor the years, I have parked all my premium fares, flown on Star Alliance carriers, to BMI’s Diamond Club program due to generous multipliers for such fares.  Although the program has been devalued somewhat over the years, it has still been my number one for redeeming in international business class flights.

The British Midland International (BMI) has been, however, a loss making operation for years. Lufthansa was forced to buy the carrier back in 2009 when the owners exercised their option to sell.

According to the Financial Times article on this issue, the parties are expected the regulatory approval of this deal on the first quarter of 2012. It is not sure, however, how fast BMI is then forced to leave Star Alliance.

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Time to get the last redemptions in using Diamond Club miles in before they turn into Avios.

The End Of BMI (British Midland International) and Its Diamond Club Is Finally Near?

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It hasn’t been unclear for a while that Lufthansa has been seeking a solution for its ownership of BMI. Over the years Lufthansa has acquired quite a few European airlines like SN Brussels (airline that came alive after Sabena went bust), Swiss International Air Lines (incarnation of Swissair that also went bust), Austrian Airlines, and quite a few other regional or charter airlines. Lufthansa also owns 19% stake of JetBlue.

Reuters BMI IAGAccording to the article on the Sunday Times since getting involved with the BMI in the 1999 the whole exercise has cost Lufthansa about one billion dollars.  Last week Lufthansa and IAG announced that they had reached a tentative agreement for BMI. IAG would buy the airline. IAG is the holding company that currently owns both British Airways and Iberia. Virgin Atlantic also announced that they were in discussion with Lufthansa regarding buying the BMI.

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