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Tue 13 Sep 2011 07:54 PM

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Emirates bows out as Virgin eyes bmi deal

Virgin says keen to combine with loss-making bmi, Etihad stays mute on interest

Emirates bows out as Virgin eyes bmi deal
Richard Branson Virgin Atlantic
Emirates bows out as Virgin eyes bmi deal
Emirates passenger flights to Spain, which begin on August 1, follow in the footsteps of Emirates SkyCargo, which has been operating freighter flights to Spain since 2006. (Photo supplied)

Dubai flag carrier Emirates Airline has bowed out of
a potential bidding war for British Midland International or bmi, the UK
airline which Germany’s Lufthansa may be looking to sell.

Emirates, the largest international airline, was
among carriers including Etihad Airways and Air France-KLM said to have
expressed interest for the loss-making bmi, as it moved to build its share of
long-haul transfer traffic.

Emirates is building up a fleet of 90 A380s with a
total of 45,000 seats and a list price of $34bn, as it seeks to direct price-sensitive passengers through
Dubai.

But a spokesperson for the airline told the Wall
Street Journal on Tuesday that the carrier “is focused
on its own growth, and has no plans to acquire bmi or any other airline."

Etihad didn't rule out its interest, but told the
newswire that "we never comment on speculation of this nature, except to
say that we talk regularly and frequently to many airlines and a range of other
businesses from all over the world about issues and opportunities."

British airline Virgin Atlantic said Tuesday it was
keen on combining with bmi and continued to monitor the situation.

"We continue to have a close interest in a
combination with bmi," Virgin said in a statement. International Airlines
Group, formed by the merger of British Airways and Iberia, on Monday said it
was still keen to get hold of bmi's coveted slots at London's Heathrow airport.

Bmi controls about 11 percent of the take-off and
landing slots at Heathrow, the world's second-busiest airport, making it second
there only to BA, which has around 42 percent of the slots.

Lufthansa has said that it is considering finding a
partner for the loss-making bmi, and a source told Reuters on Sunday that it
had mandated bankers to sound out a potential sale.

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