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Lufthansa

Communications support to Lufthansa for its sale of bmi to IAG, owner of UK flagship carrier British Airways

The Challenge

In 2011, Lufthansa, like all other European airline groups, was facing a very fragile economic environment and increased pressure to cut costs. To strengthen its position, Lufthansa decided to focus on its core business and so began evaluating all available options for its underperforming British subsidiary, British Midland International (bmi), including a sale of the entire business unit. Bmi was seen not to be in line with Lufthansa's core business and was making a loss after being adversely affected by a number of external factors over several years.

The Lufthansa team was facing the following communications challenge: While the financial markets were likely to reward management's attempts to solve the problem, it was likely that the media would pose questions such as "Who is to blame of the demise of bmi?" and "Who benefits from the sale?". The storyline therefore needed to reflect both the Lufthansa management's rationale and the potential future of bmi, while taking into account the potential impact of the sale on local employees as well as the particular circumstances related to a German airline owning a UK company.

Communications Solution

CNC provided cross-border (UK/Germany) communications support to Lufthansa for its sale of bmi to International Airlines Group (IAG), owner of UK flagship carrier British Airways.  CNC developed a comprehensive communications strategy and toolbox, including a storyline, messaging, scenario plan and contingency statements, as well as UK media relations support. CNC acted as the interface between Lufthansa and bmi, ensuring coordinated and aligned messaging to secure the interests of both parties where possible. This involved positioning a storyline that underlined Lufthansa's need for action but also emphasised bmi's value as a core asset under different ownership.

Outcome

The sale of bmi to IAG by Lufthansa was well received by both analysts and media, not only for enabling the company to focus more on its core business, but also for providing bmi a home as part of its British peer. The management was seen to have acted decisively, without losing track of its responsibilities to its subsidiary.

 

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