Lufthansa to sell no-frills brand Bmibaby to unnamed UK-based firm

Lufthansa's UK subsidiary British Midland International (BMI) yesterday announced that it has signed a term sheet to sell its regional no-frills brand Bmibaby to an unnamed UK-based company.

BMI said it had signed a term sheet for the sale of Bmibaby, including its assets, 14 aircrafts, staff and existing route network for an undisclosed sum.

BMI said, ''The new potential owner would continue to use the existing brand name for an interim period,'' and added that it's ''pleased with the opportunity that this transaction gives to the Bmibaby business enabling it to be an independent airline.''

If the Bmibaby deal goes through, the airline's headquarters will remain in the Midlands and continue to operate from its three current bases, East Midlands, Birmingham and Belfast City.

BmiIbaby operates 12 Boeing 737-300 aircraft and two 737-500 variants, and flies to 36 destinations including Barcelona, Munich and Paris. It reported a loss of about $129 million last year.

The Bmibaby deal comes a month after International Airlines Group (IAG), the owner of British Airways and Spanish carrier Iberia, signed a binding agreement to buy BMI for £172.5 million from Lufthansa. Bmibaby and BMI Regional units are not part of the proposed takeover.

But the proposed takeover of BMI has been opposed by Sir Richard Branson's Virgin Atlantic, on competition grounds, since the deal would give IAG near monopoly of Heathrow airport, where British Airways holds the highest number of take-off and landing slots, while BMI holds the second-highest.

IAG will get 56 additional taking off and landing slots at Heathrow, UK's biggest and busiest airport once it acquires BMI.