Sep 19, 2008

Business - BMI merging with Etihad ?

UK airline BMI has declined to comment on newspaper speculation that it has been approached by Abu Dhabi carrier Etihad over a possible merger.

Etihad first went to BMI in the summer over a potential deal which values BMI at £600m, the Sunday Times reported.

The Middle East airline is also said to have spoken to Germany's Lufthansa, which owns a 30% stake in BMI.

Etihad said it had had "a number of discussions with a variety of carriers" but "no firm talks planned".

BMI operates more flights from London's main Heathrow Airport than any other airline except British Airways.

Industry-wide issues

Like almost all airlines, BMI has seen its profits trimmed this year by the continuing high price of aviation fuel.

This has led to a number of carriers seeking closer ties with rivals, such as British Airways plans for a tie-up with American Airlines.

Other carriers have faced financial problems, such as Italy's Alitalia, which is trying to secure a rescue deal.

BMI flew 10.6 million passengers last year, and operated 70 aircraft

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