Lufthansa To Slash BMI Capacity

The Lufthansa Group plans to cut 25 percent of the capacity of its recently acquired United Kingdom subsidiary BMI, according to reports published yesterday. The axing of unprofitable routes, which will involve the loss of 800 jobs, is expected to save £100 million per year.

Chief executive officer Wolfgang Prock-Schauer, who was parachuted into the job by Lufthansa in November 2009, also said the airline will revert to its original full name of British Midland International. The airline lost £156 million in 2008 and Prock-Schauer expects the figure for 2009 to be slightly worse.

Lufthansa was forced to buy British Midland last year after majority owner Sir Michael Bishop exercised a 10-year-old right to sell to the German flag-carrier. A dozen airlines expressed interest in buying some or all of the assets from Lufthansa but it has decided not to sell while it restructures British Midland. However, Lufthansa has leased some of the 10 percent of slots British Midland owns at Heathrow to itself and other Star Alliance carriers, and a handful to competitors.

Lufthansa announced this week that passenger numbers for its main Lufthansa airline increased 1.2 percent to 12.2 million in the first quarter of 2010, although sales were hit by industrial action by its pilots.