BMI on Merger Rumor: "No Comment"

Etihad first went to BMI in the summer over a potential deal which values BMI at £600m, the Sunday Times reported.

The Middle East airline is also said to have spoken to Germany's Lufthansa, which owns a 30% stake in BMI.

Etihad said it had had "a number of discussions with a variety of carriers" but "no firm talks planned".

BMI operates more flights from London's main Heathrow Airport than any other airline except British Airways.

Senior sources in the Gulf say Etihad, the national carrier of the United Arab Emirates, has approached both BMI and Lufthansa, the German airline that holds a stake in BMI.