Ever since Sir Michael Bishop exercised his put option and made Lufthansa purchase the majority shares stake in BMI - the UK carrier has been headed down hill.

It has lost market share and pulled back.  The crown jewels remain its footprint at LHR. As the #3 airline at LHR - the valuable slots are idling there.

There was some hope that LH would use the BD footprint to build a base in the market out of Heathrow for the Star alliance family but in truth the carrier continues its down sizing.

It announced a 50% reduction at Manchester and now comes news of the sale of 6 slot pairs at LHR to - of all people IAG's British Airways unit. Based on the last major transaction at LHR a slot pair is typically worth around $50 million each. Therefore 6 slots would be worth approx $300 million.  This latest transaction will boost IAG's slots at LHR to close to 50%. Interestingly enough that still keeps IAG share of the slots at its home market less than that of its closest rivals - AF - CDG, LH, FRA and MUC.

In steps Sir Richard Branson - who is himself competing to purchase the company for the Virgin group - predominantly Virgin Atlantic. He had a nicer term for it... Salami Slicing. he contends the company should be kept intact and sold as such.

Either way the once proud and feisty airline that could is unlikely to survive in its current form. The 3 divisions - Mainline - largely based at LHR with an HQ in the Midlands, Regional - operating commuter aircraft based in Aberdeen and the upstart BMI Baby also based in the Midlands as a LCC type operator will likely be dismembered and sold..

Cheers

Thanks for reading - private comments please to professorsabena@gmail.com

Timothy O Neil-Dunne, T2s Managing Partner, serves as the lead for the Airline, Aviation and Airport Practice.

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