BMI bought by Virgin

[Walnut]

I have received from a good source that Virgin is to buy bmi with BA buying 6 slot pairs as part of the deal

[KERDUNKER]

Great, can I volunteer for the next add campaign please.:)

[millerscourt]

As Virgin is 49% owned by Singapore Airlines who have seen their investment become almost worthless I doubt if they would agree to throwing more money down the plughole.

[flyingfrog]

Is this your source? http://www.pprune.org/airlines-airports-routes/311882-bmi-137.html :ugh::mad::=

[Mr @ Spotty M]

Well the 6 Slot pairs is correct, as news already in the travel press, can not confirm or de-nigh the virgin info.

[BarbiesBoyfriend]

A pal of mine confirms that Lufty have started flogging BMIs slots.

Is this the end for BMI?

Sadly, it might be. :sad:

[Cyrano]

You might want to change the entirely misleading :ugh: thread title to something which actually reflects what you are saying, such as "Virgin to buy bmi?" or better still, contribute to the discussion on the same subjects on the existing bmi thread in Airlines, Airports & Routes.

[QAR ASR]

Millerscourt, what is your basis for valuing Virgin as virtually worthless?

Full explanation would be appreciated.....

[millerscourt]

QAR ASR

Based on the fact that SIA have been trying to sell their 49% for many years with no takers because their £600m+ investment has returned virtually nothing in dividends.

[Richard Taylor]

"It would be a peculiar competition body that would permit BA to takeover bmi..."

BA have taken over/acquired the likes of Caledonian, DanAir, Brymon over the years, I seem to recall. So wouldn't be that unusual for BA to snap up the competition?

[Count von Altibar]

The front-runner has to still be BA, the slot sale could be part of a wider deal that is being struck. I think a bmi/Virgin arrangement could be a possibility but would be a nightmare to action financially and probably the same as an operation trying to compete with IAG. I think the thread title is inaccurate, who really knows except the people at the top of Lufthansa?

[atmosphere]

If Virgin took over BMI I would bet that the whole lot would go down the pan in a year!

If LH can't make good of their investment with heaps and heaps of cash, then what chance do Virgin have? it's not like they are sitting on a ton of money that they are willing to throw about in some crazy attempt to make BMI work for them, Virgin have their own dwindling profit and market share loss to worry about, without taking on a company losing £660000 a day / 240million a year. BMI is dead, it's a shame because it's a great company.

If there was a way for Virgin to take BMI as it is, without it's debts, shut it down, and re open as Virgin Europe and feed the long haul network it might work, but as a going concern, it would kill both airlines, and fast.

Two wrongs rarely make a right, as BMI proved when purchasing B|MED

I like both airlines, but I don't see it working.

[JSCL]

If this happened, it WOULD become Virgin BMI quite likely i.e. Virgin British Midland - with the slots included, it could seriously challenge BA more in the LHR market for it's connections - I would personally love to see a Virgin product inter-EU, but at the same time, I would hate to see BMI and the guys at BMI go.

It's tense, but why stupid threads throwing theories around without backed up evidence? Sure, it's a rumour network etc etc etc - but why not just stick it to the BMI thread?

Using the footer:

As these are anonymous forums the origins of the contributions may be opposite to what may be apparent. In fact the press may use it, or the unscrupulous, or sciolists*, to elicit certain reactions.

*"sciolist"... Noun, archaic. "a person who pretends to be knowledgeable and well informed".

I think 'sciolist' is the correct word for most of this at the moment.

[Young Paul]

The difference between bmi and Caledonian etc is that Caledonian were never the second biggest operator at LHR. That's why it's an issue as far as competition is concerned. Though having said that, the current 11% is far less of an issue than the 18% that it used to be.

Virgin would be stronger with bmi, and vice versa. Bmi needs better branding; Virgin needs better connectivity. It's a marriage made in heaven, and the workers at bmi have known that for years. Unfortunately, the heads of both airlines apparently didn't get on in the past ..... However, whether the investment of time and money now required to make it work is available to either is a different question.

[CabinCrewe]

Apart from aquiring the Caledonian name again, BA never took over or aquired Caledonian- they were the inhouse subsidiary developed from BAirtours. Infact BA offloaded Caledonian to the Carlson group.

[MidlandDeltic]

BA have taken over/acquired the likes of Caledonian, DanAir, Brymon over the years, I seem to recall. So wouldn't be that unusual for BA to snap up the competition?

Competition law has strengthened considerably since the takeovers you mentioned.

[Flypuppy]

Cabin Crewe,

BA bought British Caledonian in December 1987. BCal retained the rights to the name Caledonian and BA rebranded Airtours as such in 1988.

Caledonian was sold to the Inspiration Group which was part of Carlson, in 1995. Inspirations became part of Thomas Cook in 1999. Then it was merged with Flying Colours to form JMC and then Thomas Cook.

If I remember correctly, BCal were in protracted negotiations with SAS during the summer of 87, when BA came along and in the space of 3 days a deal was done with BA, and that was the end of BCal. Is this prescient?

[LD12986]

I have received from a good source that Virgin is to buy bmi with BA buying 6 slot pairs as part of the deal

Perhaps you could ask your source when was the last time Virgin stumped up for an acquisition with cold hard cash?

[LGS6753]

If BMI are losing as much as stated, perhaps Lufthansa would give them away to get them off the balance sheet...............

[toledoashley]

As I said on the other thread, the 'Virgin Group' could buy BD, without the politics of VS/SQ. It could then be run like VX/VA until such a time as it could be brought together.

[millerscourt]

What with? Why do you think Branson was so keen to sell 49% of Virgin in the first place.

[pwalhx]

Surely the original premise of this thread is flawed as the rumour was the sale of the airline and slots as a single entity, when in fact we all knew about the slot sale yesterday?

[LD12986]

As I said on the other thread, the 'Virgin Group' could buy BD, without the politics of VS/SQ. It could then be run like VX/VA until such a time as it could be brought together.

Virgin Express? ;)

[TSR2]

Nope, your wrong.

[munster]

the word on the ground with the baby crews in BHX is that stelios is a cash buyer wanting to invest his £70 million dividend and wipe easyjet off the map!!!

[ETOPS]

But why would you want to "wipe off the map" something that just paid you £70 million?

[Mr A Tis]

The thread title is incorrect (as things stand). Can we close this thread or merge it with the existing BMI thread?:bored:

[Cyber Bob]

Virgin won't be buying anything. If there is a deal to be done here, VS will ensure that there is no cash outlay.

Perhaps a red herring story - as I'm sure that Virgin are looking strengthen in other ways.;)

[STN Ramp Rat]

I have watched the recent BMi developments with interest. I have no inside knowledge on any of the players in this deal and am simply offering this as an alternative theory.

It is not long since LH offered BMi for sale, there was no interest that was acceptable to its owners, Lufthansa and they withdrew it from the market. The only change to have happened since then is that the market conditions have got tougher. BMi is very sick and burns so much cash that Lufthansa would have to provide a significant dowry to offload it. From this I conclude that Lufthansa know who was interested and there will be no new interest. They only needed to pick up the phone and ring up IAG and Virgin to see if they want it, there is no need to appoint at, presumably, a great cost city lawyers and bankers. They prepped the company for sale a couple of years ago, nothing much will have changed except the situation has got worse. It may in fact be cheaper just to close it down and realise the only “value” in the company, its slots. These slots have no value however unless they are used so they need to keep BMi flying until they offload the slots, if this is their plan then the slot sale to BA is the start of a long lingering death for BMi.

Alternatively Lufthansa could go “double or quits” everyone knows that the BMi Virgin merger is the biggest deal never to have happened in recent British aviation history. Virgin is just about keeping its head above water and BMi would sink it within a very short time period, mergers have high initial costs to cash flow. Lots of redundancy, early termination of contracts with exit payments and loss of focus on the original business as everyone struggles to cope with the change. If as was stated in the thread above, and I have not checked, Singapore Airlines have written the value of their investment in Virgin down to zero they are not about to allow them to get into a deal that will require this amount of cash, to the contrary they will be open to any offer, after all they have said it is worth nothing.

Robert Anthony Wilson said “The best place to hide something is out in the open. Nobody ever thinks to look there.” Everyone is talking about Virgin buying BMi. Maybe Lufthansa have agreed in principle to acquire Virgin and the work being done by he lawyers in BMi is all about acquiring Virgin and merging the two businesses into a single Star Alliance airline based out of London under the BMi brand.

[B744IRE]

Virgin buy SAS stake in BMI (if they still have one?)
Lufthansa buy SIA stake in Virgin
All in STAR managed by Lufthansa
Virgin Express/BMI feed LHR/LGW
Virgin Atlantic/BMI operate Virgin/Lufthansa flights out of LHR/LGW

Fleet to be B747-800s and A330s:ok:

SIMPLZ

[SealinkBF]

I can't see the logic of VS taking on BMI.

EDIT: Although LH buying VS. Wow! That would be clever!!!

If feeder flights were so strong and so essential, we'd still have BA flying from BFS, DUB and INV to LHR for a start. Maybe I am simplifying things too much, but VS has survived without a domestic network until now!

British Midland used to be a very strong brand. Those dark blue coloured 'planes, Diamond Service, popular with travel agents etc. And then they became bmi.

I worked in the travel industry back then and there were all sorts of rumours going around that British Midland was going to rebrand as 'bluebird' or something similar. What we got was bmi, with the 'i' standing for "anything you want it to'. (Their words). I think that started a malaise. They got confused. bmibaby, bmi regional and bmi mainline: all with differing levels of service. Not one brand is strong. (In fact I see bmibaby as untrustworthy following the revelations about their creative way of charging for bags. )

bmi forgot that if you are not the flag carrier, you need a punchy, evocative name to rise above the marketing antics of EZY, FR etc. bmi is not that name.

And now a once brilliant airline is on its knees.

I flew with them from BHD last week, the crew were lovely, the 'plane spotless. and very smart. I feel sorry for their staff who cannot be immune to the turmoil surrounding the airline, and to which I am unwittingly adding to with posts like this.

[Facelookbovvered]

I like the idea of hide it in the open and double or quits, but hell of a gamble......... i suspect that DLH already have an end game in mind, i just somehow can't see them shutting the lot down or selling it to IAG either. With bmi and VS share held by SIA worthless the cost of doing something in cash terms here is small, it just a paper exercise and probably a tax charge positive? who knows bmi and virgin under one roof within Star might work, it would certainly make IAG and oneworlds life more difficult.

[LD12986]

Virgin buy SAS stake in BMI (if they still have one?)
Lufthansa buy SIA stake in Virgin
All in STAR managed by Lufthansa
Virgin Express/BMI feed LHR/LGW
Virgin Atlantic/BMI operate Virgin/Lufthansa flights out of LHR/LGW

Fleet to be B747-800s and A330s

SIMPLZ

SAS has sold its stake in bmi.

LH will not buy a minority stake in VS. Why would a group of the might of LH want to buy a stake in an airline where they won't have control? Why divert traffic from its own hubs where it won't get 100% of the revenue benefit?

The point made this week which probably explains LH's thinking is that at FRA, MUC, ZRH etc LH is Number 1. At LHR, even combined with BD, they will always be Number 2 and by a considerable margin. VS is a niche long-haul airline (and that's not intended to underplay its considerable achievements) and trying to build a 2nd major network carrier at LHR is unlikely to work. You will never match BA on network and frequency.

[STN Ramp Rat]

any deal may well be for a £1 BUT.... someone needs to have deep pockets just to keep the thing in the air until they can make a profit. its that point that is key to any deal. you are going to have to burn a lot of cash before there is a sniff of a profit

LH will not buy a minority stake in VS. Why would a group of the might of LH want to buy a stake in an airline where they won't have control? Why divert traffic from its own hubs where it won't get 100% of the revenue benefit?

my theory assumed that they would buy the SQ stake and the Virgin stake thus giving them 100% ownership

[LD12986]

I think Willie Walsh was spot on when he questioned the merits of buying a business that has always been associated with a personality and is regarded by its owner as his "baby". The never ending trouble easyJet have with Stelios is a salutary warning.

[Young Paul]

Yes, but Sir Michael is no longer a shareholder - that's a pretty fundamental difference.

[33percentlonger]

I can see VS acquiring BMi, with VS becoming a part of star in the process along with a good deal for LH on interline flights and expand feeder traffic through the UK for VS and would allow LH to sell interline flights at a better rate for themselves through the BMi and VS network.

Remember RB's comments “There is likely to be an announcement of an alliance coming very soon,”

(Virgin Atlantic Will Join an Alliance Soon, Says Richard Branson - Forbes (http://www.forbes.com/sites/jonbruner/2011/09/14/virgin-atlantic-will-join-an-alliance-soon-says-richard-branson/))

It just looks like a way for LH to get BMi off the books but get something out of the sale in the long run...!

[PAXboy]

BA/IAG only want the slots - nothing else and have shown no indication of wanting to buy a regional. Their plan is to get fully fledged carriers into their group.

Ten years ago, VS would have killed several grannies to get BM/bmi to get their feeder network - but that network has been decimated by RF + EZY and the others, so that bmi has fallen between two stools. I won't rake over it all now as it is history but there was some agreement (I recall) the stubborness of one man prevented the sale going to the company that really wanted them, VS.

Are bmi going to get squeezed out? Highly likely. A great pity, a good company but they are in the middle rank and the pax are now with the LCCs and the big boys.

[Skipness One Echo]

Virgin do not have the talent to succeed where Lufthansa failed, indeed the current team have hardly set the world alight beyond introducing a new shade of red paint. The idea that bmi as it is today would feed VS is comic. The only feeder routes are UK and Ireland and they are under immense pressure. Where does ex BMed fit in? Indeed VS wouldn't know what to do with the slots even if it got them. Taking on a failing carrier like BMI could wind up killing an underperforming VS. Remember SRB has little to do with VS day to day and I am still awaiting the GLA-JFK he promised when BA pulled out.

[munster]

Ref stelios' interest in baby.
Fastjet.com (http://www.fastjet.com)
:ugh: