UPDATE: Lufthansa In Talks With SAS Over 20% Stake In BMI -CFO

German airline Deutsche Lufthansa AG (LHA.XE) is in talks with SAS AB (SAS.SK) over the Scandinavian carrier's 20% stake in British Midland Airways, or bmi, Lufthansa Chief Financial Officer Stephan Gemkow said Thursday.

In a conference call to journalists, Gemkow added, however, that no decision has yet been made in the talks with SAS.

Lufthansa recently raised its stake in bmi - which has over 11% of all take-off and landing rights at London Heathrow, Europe's largest airport - to 80%.

SAS has previously said it wants to sell its stake in bmi as soon as possible.

Lufthansa's Gemkow said the company is evaluating options for the future of bmi, without providing details about the available options.

Virgin Atlantic, which is 51% owned by Richard Branson's Virgin Group and 49% by Singapore Airlines Limited (C6L. SG), has in the past expressed interest in bmi.

Gemkow Thursday said: "The Virgin option is only one of many." He also said Lufthansa's primary goal is to stabilize bmi's earnings in the short term.

Gemkow said he couldn't quantify the any losses bmi posted in the first half of the year, adding that Lufthansa is conducting an intensive post-merger due diligence process.

Lufthansa has, however, made loss provisions for bmi and Austrian Airlines AG (AUA.VI), which it is also planning to acquire, Gemkow said. The loss provisions amount to a two-figure million euro amount, he added.

Company Web site: www.lufthansa-financials.com

-By Jan Hromadko, Dow Jones Newswires; [phone]; [e-mail]