Lufthansa poised to take over UK carrier BMI

German airline Lufthansa is poised to take over UK carrier BMI in a deal worth £300. The move has prompted rival Virgin Atlantic to propose combining its operations with Lufthansa to create a European super-carrier.

Lufthansa, which already had a 30% stake, now owns 80% of BMI, the former British Midland, and is expected to make a bid for the remaining 20%, which is owned by Scandinavian Airlines (SAS). SAS has put both the stake and itself up for sale.

The German airline will control the 11% of slots at London’s Heathrow airport that is currently held by BMI, which would position Lufthansa as the second biggest airline operator in the UK after British Airways.

Separately, Lufthansa today (October 29) reported a 75% drop in net profit for the third quarter ending September because of high fuel prices. The latest quarterly results push down its net profits for first nine months of 2008 to 65.1%. The airline also cut its full-year operating profit target to Û1.1 billion from Û1.38 billion.