UPDATE 1-Etihad says no talks planned with possible partners

(recasts with Etihad statement)

LONDON, Sept 14 (Reuters) - Abu Dhabi's Etihad Airways said on Sunday it had no firm talks planned with any potential partners, following a press report that it had held initial discussions about a tie-up with Britain's bmi [BMID.UL].

"The long awaited process of consolidation within the aviation industry is underway and we've had a number of discussions with a variety of carriers around the world," an Etihad spokesman said.

"But Etihad Airways has no firm talks planned with any airline or any proposals in the pipeline with any new possible partner. Etihad has a commercial mandate to break even by 2010 and that is the focus within our business," he said.

Earlier, the Sunday Times reported that Etihad had held initial talks about a merger with bmi that could value bmi at up to 600 million pounds ($1.1 billion).

The newspaper, quoting unidentified senior sources in the Gulf, said Etihad had approached both bmi and Lufthansa (LHAG.DE), the German airline that owns a stake in bmi.

Lufthansa has an option to take control of bmi under a private agreement between the German group and bmi's majority owner, entrepreneur Michael Bishop.

However, the Sunday Times said Lufthansa was understood to want to sell its stake for about 200 million pounds and that talks were held with Etihad over the summer.

Lufthansa is in talks to buy Scandinavia's loss-making SAS (SAS.ST) as it hunts for bargains among airlines hit by crippling fuel costs and economic weakness, sources familiar with the matter told Reuters on Friday.

Lufthansa declined to comment. Bmi was not immediately available for comment. Etihad could not immediately be reached.

Bmi's main asset is its control of 11 percent of the highly-prized airline slots at London's Heathrow airport. (Reporting by Mark Potter; Editing by Richard Hubbard)