DEUTSCHE Lufthansa AG, Europe's second-biggest airline, said yesterday that it plans to buy a controlling stake in BMI to increase its offerings at London Heathrow airport after the United Kingdom carrier's chairman exercised an option to sell.

BMI Chairman Michael Bishop will sell his 50 percent-plus one-share stake in the Castle Donington, England-based airline, Lufthansa Chief Executive Officer Wolfgang Mayrhuber said at a press conference in Frankfurt. The option won't be exercised before January 12. Lufthansa already owns 30 percent of BMI and SAS AB has 20 percent, BMI spokesman Anthony Carew said.

Lufthansa will gain slots at Heathrow, Europe's busiest airport, where BMI is the second-biggest operator, after British Airways Plc. European airlines are adding routes under an "open skies" treaty that allows them to fly to the United States from cities outside their home countries. Cologne, Germany-based Lufthansa is also bidding to acquire Austrian Airlines AG and last month bought a 45-percent stake in Brussels Airlines.

"For Lufthansa it would certainly be an excellent deal," said Douglas McNeill, an analyst at Blue Oar Securities in London. "It would greatly strengthen their position at what is arguably Europe's preeminent airport. They seem intent on playing a leading role in the industry consolidation that is going on, reflecting their longer-term ambitions."

BMI and Lufthansa declined to say how much the German carrier will pay. Under the terms of the shareholder agreement made with Lufthansa in 1999, Bishop maintained the right to sell his stake in BMI at a preset price.

Lufthansa has said it wanted to own BMI in part to get landing spots at Heathrow. Virgin Atlantic, the UK carrier controlled by billionaire Richard Branson, had also expressed interest in buying BMI to boost its presence at the London airport.

Heathrow slots are a gray area in terms of ownership and regulation. Under European law, if airlines use them regularly for one season they have the right to keep them for the next, or effectively in perpetuity, making it difficult for new entrants to gain access.

The European Union-US treaty has raised the value of slots at the London airport, which is already operating at 99 percent of its government-allowed flight capacity, Deloitte & Touche said.