More hot air from JC.
To the bmibaby team,
Today, we have entered into a consultation period with bmibaby staff, union and employee representatives to review together future options for our business.
In order to fully appreciate the options available to us, it may help to understand the current position we are in. While we have taken great steps forward, having delivered market leading operational performance and customer service levels, our business continues to incur significant losses. In recent years we have taken the necessary steps to improve our business such as reducing in size to reflect market demand and consolidating our operations into the Midlands and Belfast.
However, while the changes mentioned above have had some positive effect, the sustained high cost of fuel, competitive trading environment and economic pressures mean the business continues to incur significant losses. We are also constrained by our fleet type, and the network that is achievable with such aircraft. Most of the losses occur in the winter season, where demand to the core leisure routes is much reduced. Customer demand in the winter is for longer routes such as the Canary Islands, Egypt, etc, which are not within the effective operating range of our aircraft. In order to add these destinations to the winter network, the addition of longer range aircraft would be required. This would require significant investment, and against the backdrop of the losses being incurred, cannot be justified in the present circumstances.
Therefore without fundamental changes to the external operating environment and our network capabilities, we would continue to incur significant losses. In addition, following the sale of bmi, IAG has no plans to integrate bmibaby into British Airways and is making efforts to sell the business.
As a result the future options for our business are being reviewed. Whilst a sale of the business could still take place, if the company is not sold then, subject to the consultation process, the proposal is that the business would be closed down with effect from Monday 10th September 2012. If a suitable sale can be achieved, or a suitable alternative solution can be found, then a close down could be avoided, or at least the impact of such could be reduced.
While we review the future options for our business, as a preliminary measure we have made the decision to cancel a number of routes with effect from Monday 11th June 2012. This will aid in securing operational robustness, protecting the integrity of the remaining network, and alleviating any pressure on the network over the summer. It will also orientate the network to focus on core leisure markets only. Flights for the majority of our holiday destinations will remain in operation throughout the summer and customers can continue to book these routes with confidence. Any customer affected by a cancellation will receive a full refund automatically to their original method of payment.
I appreciate that such news is difficult to receive and we had all hoped that a suitable buyer would have been found by now. Understandably this is an unsettling time for all of us, and I will ensure I keep you informed and welcome your input as the consultation process moves forward.
Thanks as always for your support,