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Originally Posted by ft.com
bmi British Midland, the second-largest airline operating at London Heathrow airport, is eliminating an important part of its UK domestic network and is cutting capacity to continental Europe amid rising losses.
bmi will announce on friday it is axing two of its mainline services between Heathrow and Leeds Bradford and Durham Tees Valley – a total of seven daily departures – in addition to the previously announced closure of the twice-daily service between Heathrow and Jersey.
It will also be reducing the number of daily services between Heathrow and Dublin from seven to six, and between Heathrow and Amsterdam from seven to four. Capacity is being cut on the Heathrow to Aberdeen and Brussels routes by using small regional jets in place of the existing larger Airbus aircraft.
Heavy pressure to staunch losses is coming from Germany’s Lufthansa, which is due to complete its takeover of a majority 80 per cent stake in the UK carrier next month. Some BMI jets are to be leased out to Lufthansa.
The worsening of the problems facing BMI was disclosed two weeks, when the group decided to renege on a three-year pay deal and implemented a pay freeze at short notice for 2009, the third year of the deal.
The increase was paid by some banks into pilots’ accounts only to be withdrawn hours later, triggering the calling of a no-confidence ballot by pilots in Nigel Turner, BMI chief executive.
Mr Turner has previously disclosed the airline suffered the biggest loss in its history in 2008. He is expected to tell the 5,000 staff trading conditions have deteriorated further in recent weeks.
The group is being hit by a sharp reduction in both business and leisure traffic, and is being forced to take action to eliminate lossmaking routes and cut capacity.
BMI is removing about four aircraft or 12 per cent of its mainline short-haul fleet of 32 Airbus A320 family jets, which are to be used in charter rather than scheduled service. Two of the Airbus fleet are to be leased to Lufthansa together with BMI pilots and cabin crew, and will be operated on the German airline’s planned new route between Milan Malpensa and Heathrow, and Berlin and Heathrow.