LONDON, Feb 2 (Reuters) - British airline bmi said on Friday its holding company had purchased a controlling stake in carrier BMED, a franchise partner of British Airways BAY.L.
The deal creates a group with annual turnover of more than 1 billion pounds ($1.97 billion) and speeds bmi’s plans for expansion into longer routes, adding 17 destinations in 16 countries.
The holding company, British Midland Plc, said it had subscribed to approximately 30 million pounds worth of new shares in BMED, formerly called British Mediterranean.
BMED was set up by private investors in 1994 and has operated as an independent franchise partner of BA since 1997, using BA livery and branding on its fleet of three Airbus EAD.PA A320 and five A321 aircraft.
It flies to countries in Africa, the Middle East and Central Asia and has 770 employees.
The chairman of bmi, Sir Michael Bishop, Chief Executive Nigel Turner and Deputy Chief Executive Tim Bye have been appointed to the BMED board with immediate effect, bmi said in an e-mail.
BMED CEO David Richardson will stay on, while all non-executive directors have resigned.
“An agreement has been reached with British Airways that will see the franchise agreement and any other commercial agreements that exist with them continuing for a transitionary period until the end of the summer 2007 timetable,” it said.
“In the short term we plan for the business to continue to operate as it does today with no immediate changes to network or structure.
“A comprehensive review of the business will take place over the next 30 days,” it said.
A BA spokeswoman said: “We’ll ensure there’s an orderly transition of the business.”