Knock on effects from the bmi sale to IAG
There are a few points to bear in mind when musing over the likely effects on our LHR links.
1. BA left BFS because they needed the slots for their migration of longhaul from Gatwick to Heathrow. Their stated reasons were just a smokescreen. It wasn't about profitability as such though I understand they did have an issue as to how revenue was divided up for connecting flights.
2. There are undoubtedly high fares to be earned at peak business times out of BHD. HOWEVER, when booking ahead I almost always get better fares on bmi, than on IE from BFS.
3. Business passengers follow the schedule, IE does not have enough flights to be business friendly.
4. Everyone was surprised when IE cut back next summers schedule. This has been interpreted as due to weak demand. I have seen no real evidence of weak demand. The flights are fairly full and getting decent fares. IMHO it is much more likely that IE were aware in advance of the negotiations between LH and IAG and have decided to play safe.
5. IAG are almost certainly still interested in buying IE, subject to the pensions liability being resolved. Given that absolutely no buyer will be interested whilst there is a pension liability, IAG is frontrunner for evental ownership of IE.
6. BA do not have enough capacity at T5. This is a real problem as minimum connecting times from T1 to T5 are too high. (T5 to T1 is much quicker).
7. Finally. Things have changed a lot in 10 years. The past is not much of a guide to the future. BA has drastically cut their operating costs and IE run a very effcient base at BFS.
There are a lot of scenarios that could play out.
- IE could pick up some extra slots and operate a full schedule from BFS.
- IE and BA could set up a joint full business friendly schedule from BFS.
- BA could retain the BHD service pretty much as is, at least in the medium term.
Given the IE cutback next summer. I'd go for the third option for now.
The proposed takeover timescale is very agressive, perhaps we won't have to wait very long.