Tartin - Considering everyone in BA has been told BMI remain a competitor it seems unlikely anyone from BA would be daft enough to do this at a conference.
Would you care to name the person and conference or is this just a rumour?
This is all standard pre merger / takeover stuff. IAG needs to cover itself against the possibility that the EU unexpectedly either blocks the transaction or imposes sufficiently stringent conditions as to effectively block it. Furthermore any kind of co-operation at the moment between bmi and IAG may be viewed as being a cartel or a breach of competition rules - hardly welcome when competition authorities are watching all parties involved extra carefully at the moment. The obvious solution is for IAG to go out of its way to emphasise to staff the importance of treating bmi as a competitor. That way if someone from BA does something ill advised, IAG can say it wa just a rogue member of staff who will be sent for disciplinary action.
In the UK, while legally different entities, BA *is* IAG, and IAG *is* BA effectively. bmi is not big in Spain and while there might be the odd cabin crew with a Spanish spouse who wants to transfer to Madrid this will be an exception. If the transaction goes through bmi mainline flight operations and back office will be merged into BA. bmi as a legal entity may however survive for a lot longer. The costs of maintaining bmi as a separate brand are just too high to do anything else - there is little emotional attachment amongs the UK public to seeing bmi as the UK's sole national flag carrier, being bought up by evil forsigners unlike as might have happened with KLM, Swiss or Austrian - this will be more akin to American Airlines buying TWA - once the legal side had completsd the TWA logo disappeared quickly.
Suppose someone from BA gives a presentation entitled "What will happen if IAG buys bmi?" Substantially the same subject with the same content, everyone in IAG remains on message, and the lawyers and competition authorities are happy.
Last edited by davidjohnson6; 18th Feb 2012 at 15:36.
Flypuppy - are there credible companies out there who want to take over bmir and even if LH / IAG pay them to take on bmir, can they put together a business plan which has the support of their main bank and won't risk breaching existing debt covenants ?
While a company with no debt can do whatever the shareholders and directors desire, most companies either have a loan or will need a loan to grow their business. If the bank manager won't lend or only at a very high interest rate, then usually better not to start the project in the first place.
The longer it takes for a buyer for either bmibaby or bmir to sign a legally binding contract of sale, the less likely it is that anything will be signed at all.
On the politics side, there will still be Loganair - allowing a defence to the 'Scotland has an airline no more' claim. When Malev went bust, life in Hungary still carried on...
Last edited by davidjohnson6; 18th Feb 2012 at 16:19.
My point about the bank being supportive is that if Granite or whoever else take in bmir, even with a handout from DLH / IAG to take on bmir, it is likely that Granite will need to borrow some cash from somewhere to cover losses until bmir is lobg term profitable. This could mean raising equity from current shareholders, talking to a venture capital fund, but it's likely the bulk of the cash will come from a bank. If the bank won't commit now to providing a loan facility in the next 2 years it puts much more risk on the shareholders - are the shareholders willing to accept the risk of possible over expansion ?
Re Regional I think that the deal re Granite was announced in what Oct or Nov? and seems to have stalled, the rumours are that Granite would get £2 of assets for every £1 invested,so for an investor it's double your money apart that is from ensuring that it at leasts breaks even.
I don't think the Scottish card comes into it. Bmir may have its operational head office in ABZ but it's run from the Midlands like or not or more accurately FRA. There is no shortage of flights between Scotland & England so I doubt the competion people will be concerned one way or the other, access to LHR is of course another matter, but we are all Europeans now so LHR is to be viewed the same as AMS BRU CDG FRA and let's face it many choose to avoid LHR.
Speaking strictly from a pilots point of view many may be better off within IAG let's face it a back door into BA would be a result that few could have dreamt of!
Bmi is to be intergrated into BA not IAG 6 months from now bmi will not exsist all bmi slots will be flown by BA tails. I if you think otherwise let's hear your vision of how this will unfold?
Why don't some of you do some research before posting? The buyer for bmi is still not precisely determined, according to the papers submitted to the EU Competition Comission:
"International Airlines Group (IAG) and LHBD Holding Limited entered into an agreement on 22 December 2011 pursuant to which IAG – directly or via its subsidiary BA – will acquire from LHBD Holding Limited 100% of the shares of British Midland Limited (bmi)."
So either eventuality remains a possibility. I wouldn't be a bit surprised if the actual purchaser is determined by the existence of baby and/or regional within the bmi group at the time of purchase.
If you really believe that the Scottish Government are going to just let BA/IAG close down a Scottish airline with out a screaming match
flypuppy, this may well be fair comment, though lets consider Scotland and BA. BA fly LHR, LGW and LCY to Scotland to 3 airports.
On the LHR routes BA will be the sole operators if the acquisition goes ahead. It would seem unlikely that the capacity will be expanded in an overall context, on say LHR Scotland routes. If anythink BA will make the capacity as close a match to demand or current pax numbers overall so as to ensure best use of the limited slots at London.
Back to point, given that in the main BA is the primary carrier and has attractive routes, what will the PR do, drive passengers to the competition on the main routes to LHR their will be no exact competition, hence what will the passengers do start flying to other London airports instead when LHR is really where they want to go???? Maybe they could do AFWX to LCY and EZY to LGW. Im not convinced that the potential negative PR will do much harm at all, if this materialises.
On the subject of the who will buy or own bmi, depending on the contract that is in place for bmi staff (or bmir or baby for that matter), will have a bearing on the future.Eg if the contract says 'we reserve the right to move your work to a different country etc in line with the needs of the business' (note down work for bmi etc so dont know the precise details, the employees will). Will these contract details still stand and if so could say pilots be offered say moved to different divisions subject to type rating and need etc.. and have an option to go or not. Not sure that it matters one bit who is said to be buying the company over.
IAG is buying and it will do whatever it likes with the assets when it takes them over. Note also (hate to say it) BA and Willie will make commercial decisions that are right for the financial health of IAG/BA/IB etc. He will give maximum comfort on things like domestic routes, monopoly situation etc until the green light is given to the take over. That makes perfect sense, I cant see him having decided on routes etc until that happens.
Interesting to see that from today I see EI BFS LHR flights now show codeshare with BA on departure screens.... this hasnt happened in the last 4 years.
If you really believe that the Scottish Government are going to just let BA/IAG close down a Scottish airline with out a screaming match I think you may not understand just how badly BA are regarded by Holyrood. The Scottish media would love a pop at BA, and would give Lufty an impressive PR reaming
Yup, mainly as they are inward looking insular racist and anti English, God forbid we admit that one. Before you kick off, I am a Scot from the West of Scotland so the "England are to blame for all Scotland's ills" nonsense is well indoctrinated. The country of Hume and Adam Smith is long dead.
I have after reading the last few days of posts, have this to put forward. The LHBD group has agreed to sell the BMI group, to the IAG group. So my take on it is this, IAG owns BA and plans to integrate one of the three airlines from the BMI group, namely BMI into BA. The other two airlines in the BMI group are not wanted by the IAG group. As pointed out, if the LHBD group can not off load BMIR & bmibaby prior to the agreed date, then the payment from IAG is drastically reduced, or nothing at all. The way l see it and l hope it does not happen, this enables the IAG group to shut down both BMIR & bmibaby. This is why the drastic reduction in price that IAG will pay.
IAG have agreed to buy 100% of the bmi group, bmibaby and bmi regional are wholly owned by bmi, it is for this reason that Willi Walsh has stated that the agreed price would be substantially reduced (£60m+) if WW and bmir are not sold prior to the share transaction completion expected end
The IAG press release never stated that bmi regional being included would incur a price reduction, just baby
I can't help but think that SRB is missing a good opportunity. He could buy baby and rename it VirginBaby. He could announce that he has ordered 200 Boeing 797s, with the new secret RR engine, to take on Ryanair and Easyjet. Money should not be a problem, he does own a bank. I hope to be on the first flight of this new airline, I missed out flying on Concorde, now what a good idea, VirginConcorde. No that would be impossible!
Location: A little south of the "Black Sheep" brewery
Posts: 130
Quote:
"There are a number routes served by both Baby and Regional which would leave Scotland less well connected to other parts of the UK... "
But the 'greenies' (in Labour, Lib-Dem, Scot Nazis, Tories as well as Greens) don't want people to travel by air, so the loss of all those services will be seen by them as a victory! There are trains... stick with them!! (Or, root out all the 'greenies'!!!)
Flypuppy may also have a point on Aberdeen. Very difficult to blame BA for not continuing beach routes to the Med but equally cannot see BA wanting to keep any route out of ABZ open besides Heathrow. Yes flybe and Eastern may compete already on Manchester and Norwich routes but when a monopoly provider fares will presumably increase. What happens to Esbjerg and Groningen though - would Eastern be interested ?
Presumably if bmir was wound up, SAS, Brussels and Swiss would each open an Edinburgh route.
