British Midland (BM) is poised to sign to with Star Alliance after agreeing to a two-week period of exclusive negotiations with Lufthansa. BM has been veering towards one global grouping after another for months.
BM says its "proposed agreement" with Lufthansa would see the German major acquire a 20% holding in the airline currently held by its Star partner SAS, thus reducing the Scandinavian carrier's stake in BM to 20%. The UK airline would then join Star, bringing with it access to the UK market.
BM's decision comes as a blow to the new Air France/Delta Air Lines alliance, which had tried to recruit it. The so-called "Wings" alliance had also wooed the airline, with KLM reported to have offered to take an equity stake.
Oneworld partner British Airways reacted angrily to the deal, claiming BM enjoys capacity and pricing privileges in the London market, and that these and BM's slots will be exploited by Star.
Source: Flight International
