Bmi in talks to sell off its Heathrow slots to cut debts

City A.M. Reporter
Loss-making carrier Bmi is in advanced negotiations to sell its prized Heathrow take-off and landing slots to plug debts of &pound;190m.<br /><br />A spokesman for the airline said: &ldquo;Negotiations are significantly advanced with several airline groups.&rdquo;<br /><br />Bmi is the second largest holder of slots at Europe&rsquo;s busiest airport, behind British Airways, with 11.5 per cent of the available air traffic.<br /><br />Bmi, which is owned by German carrier Lufthansa, estimates in its 2008 accounts these slots are worth &pound;616m, though this is down from &pound;770m the year before. <br /><br />This loss is due the battering the industry has taken from the financial crisis, which has hit both leisure and business traffic.<br /><br />Bmi made a pre-tax loss of &pound;155.6m in 2008, compared with a profit of &pound;15.5m the previous year.<br /><br />Any sale will attract interest from rivals British Airways and Virgin Atlantic, as well as fellow members of the Star Alliance to which Bmi and Lufthansa both belong.<br /><br />However, even though Bmi is in talks about a sale of some of its slots, the move it still very much a last-ditch measure. <br /><br />Lufthansa has agreed to prop up its UK subsidiary with a &pound;95m loan. And the British carrier still hopes to persuade its German parent to lend it the remaining &pound;95m. <br /><br />Bmi&rsquo;s finances have been a concern for some time. It was forced to ditch plans to freeze pilots&rsquo; wages back in February, but asked them not to demand their pay immediately.