bmibaby tipped for Luton
Well I will not say "I told you so!"
FT tips bmibaby for new Luton base
bmi british midland is to cut its 4,850-strong workforce by 10% annually over the next three years, resulting in the loss of around 1,200 jobs, largely from its main base at Heathrow Airport.
The airline said the move was part of its Project Blue Sky cost-cutting drive, drawn up in the wake of a full year loss of £19.6m, the worst in its history.
Speaking at a press conference to call on the government to increase Heathrow’s capacity, bmi chairman, Sir Michael Bishop, said the job cuts were expected to be achieved through natural wastage and there were unlikely to be any compulsory redundancies.
Project Blue Ski, which aims to make annualised cost savings of £100m within three years, will also include an overhaul of the airline’s fleet, resulting in bmi operating all Airbus aircraft and transferring its Boeing 737s to its budget arm, bmibaby.
Further savings will be achieved through a reduction in sales and distribution costs by driving more bookings onto the internet and streamlining passenger processing with greater use of self-service check-in systems.
Sir Michael also raised the possibility that bmibaby could expand from its current hubs at Cardiff and East Midlands. ‘We need a stronger base [for bmibaby] in the UK,’ he said. ‘We must go to the south east.’
According to the FT, bmi is understood to have entered into discussions with TBI, the owner of Luton Airport, about establishing a hub there. By doing so it would go head-to-head with easyJet, Europe’s biggest budget airline.
Regarding capacity, Sir Michael accused BAA of abusing its monopoly control of Heathrow, Gatwick and Stansted airports. He urged the government to ringfence BAA to its current sites and instead allow the construction and operation of new facilities, including runways, to be undertaken by a different company.
But a spokeswoman for BAA dismissed bmi’s argument. ‘You cannot have one part of an airport run by one company and another part operated by someone else,’ she said. ‘It would be an operational nightmare and could even be a safety risk.’