In the Spring the free business newspaper City:AM had an article about Singapore wanting to sell its stake in Virgin Atlantic.
In the Summer, an article about Sir Michael Bishop suggested that he knew the value of his Heathrow slots but was not about to sell the airline.
Virgin has obviously wanted to get on Board with Sir Michael. When I saw that DLH had bought his 50% I was quite surprised.
There is quite a bit going on behind the scenes, certainly for Bishop to reverse his position from the summer.
Will Lufthansa buy Singapore's 49% stake in Virgin Atlantic ??
Or is Virgin's announcement a panic media measure?
The balance sheets will probably tell the true story.
My German teacher used to tell me that the Germans don't have a word for efficient, they just are !!
This conflicts with an episode from the TV series 'Secret Army' . The British Army Major Bradley, an SOE operative said, "The Germans are neither efficient or organised, when things go wrong, they panic!"
Take your pick, perhaps this article helps?:-
Sir Michael Bishop: Plotting a steady course through stormy skies
BMI's boss tells Andrew Cave he is optimistic about the future of the airline industry, despite its current travail
Sir Michael Bishop wants to make one thing clear. While he has spent his working life in aviation, he's not passionate about it. Passion, it seems, is for fools. Instead, the BMI chairman sees himself as a pragmatist. So that's how he's survived a bumpy ride of 44 years in one of the world's most volatile industries?
"I think people will always journalistically use this term just because I started at BMI when I was 22 and I am now 66," he says carefully.
" That's 44 years in the same company, which is unusual in today's business life, but the word 'passion' implies you are immune to a pragmatic approach to your business and that's not true.
"I'm not passionate in the sense that I would do something that I felt was not in the best interests of the business or the employees. I'm pragmatic about things."
But he is enthusiastic, prods his watching
PR man. "Yes," BMI's majority shareholder concedes. "And I hope I possibly have a little knowledge of it but then a little knowledge, they say, is a dangerous thing."
More on transport
It certainly can be in the airline industry but Bishop, who took control of BMI as part of a consortium in 1978, has been in it a lot longer than the backers of grounded business-only airlines MaxJet, Eos and SilverJet.
"It's an extremely vibrant industry," he says, a little wearily. "It attracts a lot of interested publicity because people think it's a glamorous business. But I can assure you it is not, a lot of the time."
He turns to the failed carriers, whose lack of longevity is in stark contrast to his own. "MaxJet, Eos and SilverJet were financed by people who were prepared to put money in business plans, all of which failed. It's easy to say they went down because the oil price went up and there was certainly an element of that. But what absolutely amazed me is that each of these carriers actually went through about £50m of capital and cash in about 18 months." Bishop's contrasting approach is evident as he continues: "The airline industry burns cash faster than any other when things go wrong. In business, to survive, you have to be very pragmatic.
"People find the industry extremely interesting. It gives them a buzz. But it's also a quick way to lose money."
BMI is not yet doing that, though its profits last year nose-dived from £29.7m to £15.5m. To counter this, BMI has imposed fuel surcharges, like other airlines. Its restructuring scheme, Blue Skies, was already in place and has trimmed costs by £100m in the past four years. And it is reducing capacity by substituting 50-seater regional jets for 130-seater aircraft on four of its winter routes out of Heath*row. Yet the worst of th e downturn may be yet to come, with Ryanair's colourful chief executive Michael O'Leary predicting that only five European airlines will survive it.
Sir Michael is, characteristically, circumspect. "I have a certain amount of déjà vu because I think that what's happening in the airline industry is not too dissimilar to what happened in 2001 or in 1992 or in 1981," he notes.
"It's actually what happened when I first started running an airline in 1973. The problems in 1973 were basically caused one weekend when I was running BMI as a very much smaller airline and the price of oil jumped from $6 to $36.
"There was the same level of international tension in the Middle East; there were poor UK economic prospects and there was in 1974 a very similar kind of credit crisis and the prospect of recession.
"So all the ingredients that are making the airlines have difficulties now are very similar to then and I think we will have the same effects. Airlines did go out of business but we certainly didn't finish up with five airlines. I think Michael O'Leary is wrong. It's far too radical an outcome."
Instead, he's "fundamentally optimistic" about the continued long-term growth of the industry, though he believes its recovery is probably between 18 months and two-and-a-half years away.
So how does he rank the industry's problems? Predictably, the oil price tops his list. Will it rise much further? "If I knew that, I wouldn't be sitting here talking to you."
Next, he's worried about high airline taxes around the world. Then it's airport costs: the subject of week's Competition Commission report into whether BAA, the airports operator, should be broken up. Sir Michael is in no doubt that it should be.
"This was a very early privatisation and I think it's recognised that in today's world a privatisation giving this degree of market preference to one operator would not be considered to be in the national interest," he says. "We need a revision."
The main reason, he says, is that BAA's block ownership of Heathrow, Gatwick, Stansted and Southampton in the south-east and the Scottish airports of Glasgow and Edinburgh mean that there's no way of benchmarking the costs and efficiency of airports.
"We're told that airports cost so much and runways cost so much but there are a lot of different views and we have to rely on one monopoly operator to set the bar as to what the costs of building an airport are," he says. "That can't be right and it certainly can't be right to have the iniquitous level of charging that we have for short-haul flights at Heathrow.
" Airport fees should be based on costs incurred by the operation providing the facility and not on charging because of the scarcity value of the airport location. "
Sir Michael stresses that BMI supports Ferrovial, BAA's Spanish owner, and wants to co-operate with it.
"If you take a long-term view, the amount of money that Ferrovial paid is probably the value of Heathrow on its own," he says. "They won't be out of pocket on this purchase and certainly not if they have to dispose of other airports. I think there would be a strong case for them to keep Heathrow but any two of the four of Edinburgh, Glasgow, Stansted or Gatwick would probably be the right level of disposal."
Then he switches his attention to another bugbear, the ownership restrictions that he says make it difficult for global airlines to merge.
Last week's news of agreement between British Airways, Iberia of Spain and American Airlines to form a joint business to co-operate on flights from the UK and Europe to the US, Canada and Mexico is merely the latest consolidation plan to test the US Department of Transportation and the European Commission.
Bishop sees this as a natural continuation of the airline industry's three large alliances, BA and American's OneWorld, Air France and KLM's Skyteam and the Star Alliance, which includes Lufthansa, United and BMI.
"The question with American Airlines is the same one that many of the alliances share," he says phlegmatically. "The Star Alliance and Skyteam have already secured the kind of anti-trust immunity in the US that BA and American are now seeking, so it's not breaking any new ground.
"The path along which BA is now proceeding is no different. BA and Iberia are seeking to merge in the same way that Air France and KLM have. And they are seeking immunity in the same way as Air France/KLM have done with North-West in the US and Lufthansa has done with United.
"I don't think this is anything new. In fact it is more likely to be successful because there are precedents for it now. They're catching up with what's been going on for the past three or four years."
BMI has its own consolidation to consider too, with Lufthansa's call options over Bishop's stake in BMI expiring next year but he won't be drawn on what might happen.
"The two principal shareholders - Lufthansa has 30 per cent less one share and I have 50 per cent plus one share - are weighing up their options and no decisions have been made," is all that he will say.
Nor does he want to discuss his own future. At 66, can he foresee a time when he doesn't want to be involved in owning an airline? Suddenly the air turns frosty. "It's not a subject that I think it would be wise to be drawn on," he says quietly and that, apparently, is that.
Is there the hint of emotion there? It's hard to tell. But maybe this lifetime aviation man is more passionate about the industry than he cares to admit.
Source: The Telegraph