Thursday, April 19, 2012

Lufthansa still in talks over sale of low-cost carrier Bmibaby, but Flyforbeans not in the running

Sion Barry 
WalesOnline
Apr 19 2012

GERMAN airline Lufthansa said it is still in sale talks over its loss-making low-cost carrier Bmibaby.

The airline is looking to strike a deal to offload its Bmibaby and Bmi Regional subsidiaries, while its sale of Bmi to British Airways parent company IAG will be completed later this week.

IAG has agreed to pay £172m for the BMI business, but if Lufthansa is unable to offload Bmibaby and Bmi Regional, the value of the deal could be reduced by up to £80m.

If the two airlines transfer to IAG, it could look to offload the two business divisions to new owners. However, it is unlikely it would look to integrate the businesses into its operations, which would put a question mark over their futures.

Vale of Glamorgan-based Flyforbeans had been in exclusive talks with Lufthansa earlier this year over taking over Bmibaby, before Lufthansa confirmed in March that it had also entered into talks with a European-based operator.

A deal would see Bmibaby staff being transferred to new owners, with Lufthansa providing finance to support the new venture with the aim of creating a sustainable and profitable low-cost airline.

Flyforbeans, was established in 2008 with the initial aim of setting up a low-cost base from Cardiff Airport providing routes across Europe.

One of the founding directors of the business, Professor Jeremy Stone, was declared bankrupt last December.

His resignation details from Flyforbeans were published by Companies House in March.

Prof Stone is currently in the Arctic on a fundraising expedition for the Prince’s Trust.

Yesterday, Tim Lee, managing director of Flyforbeans, said: “We do not comment on rumours or speculation.”

However it is understood that Flyforbeans is no longer in talks over Bmibaby.

In a statement yesterday, Bmi said; “Regarding Bmibaby and Bmi Regional, discussions with potential buyers continue.

It added: “The completion of IAG’s purchase of Bmi from Lufthansa is due to take place later this week, and as a consequence there will be some changes to the management team at Bmi. At the point of completion, Wolfgang Prock-Schauer and Joerg Hennemann will step down as the chief executive and chief commercial officer of Bmi.

“Simone Menne will stay with Bmi as chief financial officer.

“A senior team from British Airways will join Bmi for the duration of the proposed integration process.

“Peter Simpson will become Bmi managing director, Gavin Halliday Bmi commercial director and David Lebrecht Bmi people director.

“The Bmi summer schedule will operate as planned and Bmi will continue to manage its own operations during the integration process.”

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