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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

British Airways Plc agreed to a $7 billion merger with Spanish carrier Iberia Lineas Aereas de Espana SA, ending more than a year of talks on a tie-up aimed at fighting a slump in travel and closing the gap with competitors.

Under the all-share deal, British Airways investors will own about 55 per cent of the business, to be led by Willie Walsh, the UK carrier’s chief executive.

British Airways needs a bigger network to compete with larger rivals Air France-KLM Group and Deutsche Lufthansa AG. The combination will meld the UK company’s web of US routes with Iberia’s Latin America services, extending its leading position in the lucrative trans-Atlantic market and consolidating its status as Europe’s third-largest airline.

source: business-standard.com

Unions representing Spanish airline Iberia’s cabin crews have announced a further eight days of strikes unless a pay agreement can be reached. The dates for the proposed strikes are 30 November to 2 December, and 14 December to 18 December.

The airline has already been forced to ground hundreds of flights this week due to strike action.

Most of the affected flights have been short and medium-haul.

source: BBC

A United Airlines pilot was arrested at Heathrow airport following a failed breathalyser test as he was trying to board a plane carrying 135 passengers bound for Chicago. The 51-year-old man was scheduled to take charge of the transatlantic flight.

According to a Metropolitan Police official, the pilot was apprehended at noon on Monday and subsequently released on bail.

Because of the cancelled fight, the 124 passengers and 11 crew members had to be transferred to another aircraft.

UK-based airline bmi has signed a new codeshare agreement with Continental Airlines. The new agreement is expected to provide bmi customers with access to a wider range of destinations in the US in a single booking.

The deal will reportedly allow bmi to offer fares to Newark Liberty International and George Bush Intercontinental from London Heathrow, Manchester, Birmingham International, Glasgow, Edinburgh and Brussels and also improve connections between US and the bmi network.

source: tradingmarkets.com

Deutsche Lufthansa said on Thursday it had rescheduled some aircraft delivieries that had originally been planned for 2010-2013 to help cut costs amid the global economic crisis.

Airlines around the world have been grounding airplanes and cancelling aircraft orders to cope with lower demand. Plane makers Boeing and rival Airbus are headed for their worst annual order tally in at least 15 years.

source: Reuters

FAA administrator J. Randolph Babbitt revoked the licenses of the two Northwest Airlines pilots who said they were distracted by laptops when they flew 150 miles past the Minneapolis International Airport before circling back to land.

Air traffic controllers lost radio contact with Northwest Flight 188, carrying 147 passengers, for 90 minutes Oct. 21. Controllers and airline dispatchers repeatedly tried to reach them through radio and data contact, without success. The agency cited the pilots for ignoring air traffic control instructions and “‘operating in a reckless manner that endangered the lives and property of others.'”

source: Washington Post

Iberia’s plans for a new airline, presented in the midst of merger talks with British Airways, shows the company bracing for a tough future, with or without a partner, analysts said on Friday.

The announcement of the new network airline within its 2012 strategic plan surprised the market, considering its merger plans with BA, which has hinted at a tie-up before the end of the year.

But regardless of a merger, Iberia warned of the need for innovative measures to ensure its viability as the industry weathers the worst crisis in a decade.

source: Reuters

Lufthansa is to relaunch its FlyNet in-flight internet service from the middle of next year. The airline was one of the pioneers of in-flight wi-fi, launching the Flynet service in 2003 and running it until 2006. The service ended when the company providing the service, Connexion by Boeing, turned it off. At the time, Boeing said that no market for the service had materialised. However, many American airlines now have in-flight wi-fi on large parts of their domestic fleets while OnAir is providing in-flight data services to a numebr of airlines, including British Airways.

source: Times Online

The European Commission’s competition authorities have raised concerns about the transatlantic plans of British Airways, American Airlines and Iberia.

The Oneworld alliance members want to operate as a joint business on flights between the EU and North America.

The Commission confirmed that it was still looking into similar plans for co-operation by Star Alliance members Lufthansa, Continental, United and Air Canada and between Skyteam members Air France/KLM and Delta/Northwest.

source: BBC News