Originally Posted by
Fairdealfrank
As independent entities possibly, but with BD as part of the Star Alliance, with other Star Alliance longhaul and shorthaul feed, a more comprehensive BD/VS collaboration may well have worked well at LHR.
One of the principal reasons for BMI's ultimate collapse was the extent of Star Alliance operations into Heathrow, both European and long-haul, and the sheer number of connecting passengers delivered by such carriers onto BMI domestic and short-haul flights. With the way that revenue attribution works for splitting out revenue between carriers on connections, BMI was getting just not enough to cover costs. Star Alliance was a real revenue One-Way Street benefitting the overseas carriers and disadvantaging BMI.
It wasn't/isn't an issue for BA connecting onto comparable routes, because BA with a full long-haul programme can collect 100% of the revenue, and how it is split up is just a matter for internal accounting. Further, BA's marketing etc generally ensured that the bulk of the connecting passengers on UK domestic flights were going on by BA, the number of other OneWorld connections onto American, Cathay, etc, is just a small fraction of what BMI was getting stuck with.