The second largest airline, BMI British Midland, operating at London Heathrow, has warned of biggest loss in its history in the current year.

BMI chief executive, Nigel Turner, informed its staff that group was facing the worst crisis and therefore needed restructuring.

He declared that despite aggressive measures on containing costs, the airline, which would be taken over by Lufthansa, Germany, was going to suffer loss in 2009. Nigel commented that BMI will be in intensive care for a longer period.

The disclosure of deep financial crisis in the group came just after Lufthansa’s disclosure that BMI chairman, Sir Michael Bishop, was going to exercise his option of forcing Lufthansa to take over his majority stake.

Lufthansa, which already has 30% minus one share stake in BA, would be paying £334m (€400m) for Sir Michael’s 50% plus one share stake. Balance of the 20% stake in the BMI group is held by SAS Scandinavian Airlines, which is also interested in disposal of its holdings.

In a written business communication to 5,000 staff, Turner said that airlines will be registering their heaviest loss ever recorded by a big margin. He added that the decline in consumer demand and spiralling costs beyond the airline’s control made the task very difficult. Turner also warned that staff should not expect relief from the scheduled takeover in January 2009. He warned them not to be lax and sit back to lose money. Lufthansa would expect them to act and reshape business and generate profit.

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