The Bishop and the Germans

This cosy deal is coming apart fast and will probably end up in court. Lufthansa simply walk away from the takeover of bmi, unless Sir Michael Bishop provides more capital, the FT reported, citing Lufthansa finance chief Stephan Gemkow. The paper quotes Gemkow saying that bmi's weak finances mean that contractual conditions for the takeover have not been met. "What we want to have is the company in its contractually agreed state and that means the company has the licenses it needs to operate and the funds it needs to operate," the paper quoted him as saying. "We have a situation in which, to our understanding, the conditions have not been met... if they are not met, one day we will walk away." If any airline knows its takeover contracts its Lufthansa.

Last week, a Lufthansa spokeswoman said that the approval of the EU's anti-trust authority, granted on Thursday, meant that one of the conditions of the deal had been met, "but not all." So its a case of he said, she said. Bottom line is that the Bishop can be check-mated here - he's been very clever up to now. The deal was excellent for him and and his timing on selling was perfect. But the delay in consummating it has played out his advantages. He will have to end up in court. He dare not do anything to further fritter away value - like not using (and losing) LHR slots.

In other news --

• ATA reports bad news
• AF/KLM & Delta
• AMEX cuts deeper
• SuperJet revision

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