I think G-AWZK is right in that LH must be pulling their hair out over this dismal set of figures, but I can't see them taking his advice and pulling the plug on all or parts of the group, closing baby for instance would damage the bmi brand, in part because bmibaby is so much better known than bmi or British midland which of it's self is part of the problem, at least when BA went down the low cost route it used another name unconnected with BA in GO
If one looks at the passenger numbers for the group the sector lengths of bmi v baby number of flights and load info from the CAA I would guess that over the year baby must move close to 44% of total passengers in the group, whilst he average fair will of course be far lower with baby so of course will it's non fuel costs. G-AWZK correctly points out that forth coming ageing airframe issues will require massive investment in the 737 fleet if the leases are extended, but unlike Jet2 ( who own most of their classic, but will I guess have done less cycles?) bmi can return them to the lessor without having to fund any investment, it's reported elsewhere that all of the 737 fleet is leased with expiry prior to 2014, so I would suggest that a slow reduction in fleet size is the more likely option rather than out right closure.
I think it's unlikely that we will see any knee jerk reaction from LH over these results, they unlike us have access to all the data and will have known what is coming on a day by day basis more over they will know to the penny what the non fuel costs are and whether the business is trending in the right direction excluding volatile fuel cost. In the meantime 3500 people depend on this business & LH for their income & I doubt that given he scale of LH group profits the largest in Europe the shareholders will worry too much they know a very skilful management team at LH are working on this.
G-AWZK in 3-5 years the world could be a very different place and the UK economy could well be in growth again both LH & British midland have been around a long time, but without doubt the next 18 months is critical Inkjet clearly lives in a Rose tinted world but is harmless if not hapless, whilst you do seem to think that closing baby will make the group profitable which suggest that you see the FD in a different light?