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Financial crisis could force bmi out of business in under a year

20 November 2009

British Midland (bmi) has admitted that it may not be able to continue as a going concern beyond next year in the face of an acute funding crisis at the airline.

The airline’s funding situation is sufficiently precarious for Deloitte, its accountant, to warn that there is uncertainty about whether the airline can carry on. The accounts were signed off on October 23 and Deloitte made it clear that there was no guarantee Lufthansa would stand behind its British subsidiary or give it further financial support.

Lufthansa took control of bmi when Sir Michael Bishop, the former chairman, exercised an option to sell his 50 per cent stake to the Germans for about £220 million. Much of bmi’s value lies in its ownership of 11 per cent of the landing slots at Heathrow. Slot pairs have traded for tens of millions of pounds in the past but their value has fallen in the recession. The airline has cut the value of its slots by 20 per cent from £770 million to £616 million.

source: Times Online

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