British Airways owner IAG confident of buying out bmi

London: International Airlines Group (IAG), the holding company of British Airways and Iberia, has agreed to buy Lufthansa's British unit bmi (British Midland International). It also reported a 31 per cent fall in 3Q profit, which market observers said was better than expected.

IAG said it had reached an agreement in principle with Lufthansa for the sale of the loss-making unit, subject to due diligence and regulatory clearances. bmi is the second-largest carrier operating out of Heathrow.

"We're confident we can make a success of bmi and will look to expand our network, particularly our long-haul network through this deal," IAG's chief executive Willie Walsh told reporters.

Walsh clarified that IAG had not sealed the deal entirely but was confident its offer was more attractive than others Lufthansa had received.

Rival UK carrier Virgin Atlantic said it too had bid for bmi and was "working with Lufthansa".

IAG said it expects the transaction to be completed in the first quarter of 2012.