BMI expected to break even
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BMI expected to break even
I noted this in one of todays papers. Has BMI turned the corner or is it living off of SAS and Lufthansa?.
BMI British Midland, controlled by Sir Michael Bishop, is expected to reveal this week that it managed to break even in 2004 after three years of heavy operating losses.
The airline, the second-largest operator at London’s Heathrow Airport, reported operating losses of £12.5m in 2003, £21.7m in 2002 and £29m in 2001 as it struggled to deal with the fall in traffic that followed the September 2001 terrorist attacks and the sea change in the structure of short-haul flying in Europe.
Yields, or average fare levels, have been hit by the rapid growth of the low-cost carriers led by easyJet and Ryanair. A clear sign that it has turned a corner came in preliminary figures released by BMI’s minority shareholder, SAS Scandinavian Airlines. Its 20% holding in BMI last year had a zero impact on its pre-tax income in 2004 after inflicting significant losses in 2003 and 2002.
BMI’s other shareholders include Bishop, who controls a majority stake of 50% plus one share, while German flag carrier Lufthansa holds 30% minus one share.
At Wednesday’s results for the year to December 31, 2004 - the first for new chief executive Nigel Turner - Bishop will also celebrate the upcoming launch of BMI’s first long-haul flight out of Heathrow, to Mumbai.
He is expected to target Saudi Arabia as a future long-haul destination from London while his ambition to operate transatlantic services remains frustrated by the lack of an "open skies" agreement between Europe and the US.
BMI’s improved performance last year owed a lot to Lufthansa and SAS shouldering most of the continuing losses from the three airlines’ European joint venture.
Under the terms of their deal, which runs to the end of 2007, the three airlines operate a revenue and profit-sharing joint venture comprising their European short-haul routes to and from Heathrow and Manchester.
Lufthansa is re-evaluating its 30% holding in BMI and it recently approached other carriers, including British Airways and Virgin Atlantic, to measure their interest in acquiring the stake.
BMI British Midland, controlled by Sir Michael Bishop, is expected to reveal this week that it managed to break even in 2004 after three years of heavy operating losses.
The airline, the second-largest operator at London’s Heathrow Airport, reported operating losses of £12.5m in 2003, £21.7m in 2002 and £29m in 2001 as it struggled to deal with the fall in traffic that followed the September 2001 terrorist attacks and the sea change in the structure of short-haul flying in Europe.
Yields, or average fare levels, have been hit by the rapid growth of the low-cost carriers led by easyJet and Ryanair. A clear sign that it has turned a corner came in preliminary figures released by BMI’s minority shareholder, SAS Scandinavian Airlines. Its 20% holding in BMI last year had a zero impact on its pre-tax income in 2004 after inflicting significant losses in 2003 and 2002.
BMI’s other shareholders include Bishop, who controls a majority stake of 50% plus one share, while German flag carrier Lufthansa holds 30% minus one share.
At Wednesday’s results for the year to December 31, 2004 - the first for new chief executive Nigel Turner - Bishop will also celebrate the upcoming launch of BMI’s first long-haul flight out of Heathrow, to Mumbai.
He is expected to target Saudi Arabia as a future long-haul destination from London while his ambition to operate transatlantic services remains frustrated by the lack of an "open skies" agreement between Europe and the US.
BMI’s improved performance last year owed a lot to Lufthansa and SAS shouldering most of the continuing losses from the three airlines’ European joint venture.
Under the terms of their deal, which runs to the end of 2007, the three airlines operate a revenue and profit-sharing joint venture comprising their European short-haul routes to and from Heathrow and Manchester.
Lufthansa is re-evaluating its 30% holding in BMI and it recently approached other carriers, including British Airways and Virgin Atlantic, to measure their interest in acquiring the stake.
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From: EGKK
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From: Denmark
Baby made a profit this year.
Baby is not profitable. Read the text of the press release - BMI only helps spread the overhead costs of the group, not contribute to the profits.
bmibaby
bmibaby continues to go from strength to strength and in 2004 achieved an increase in passenger carryings, load factor and yield.
The success of bmibaby has had an important role in absorbing part of the overhead cost of the group which otherwise would have had a detrimental impact on our mainline operation to the significant disadvantage of shareholders.
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From: Montréal, Québec
From today's (3/3/05) http://www.independent.co.uk/
And I always thought it was the mugs up front who paid £150 more than me who kept the operation afloat 
*j*
Bmi mulls axing business class in search for cost savings
By Michael Harrison and Saeed Shah
03 March 2005
The country's second biggest full-service scheduled airline, bmi, is close to making major changes to its European and domestic services from Heathrow in an effort to cut costs and compete more effectively with no-frills carriers.
The changes could involve the scrapping of separate business class compartments on board bmi aircraft although no final decisions have yet been taken.
Reporting financial results that showed a return to profit across the bmi group last year, the chairman, Sir Michael Bishop, said a comprehensive review of the Heathrow mainline operation was nearing completion and its conclusions would be implemented "shortly" with the aim of "significantly improving financial performance". The mainline operation accounts for about half bmi's £830m turnover.
Bmi operated a single-class cabin service until 1994 when it decided to introduce business class seating to compete more effectively with rival Heathrow operators such as British Airways. Since then, the growth of low-cost carriers such as Ryanair have changed the dynamics of European air travel. Although about half the passengers on bmi's Heathrow services travel on business, only a very small proportion fly in business class. Removing the curtain could generate big cost savings.
Nigel Turner, who instigated the review when he took over as bmi's chief executive last October, said moving to single-class cabins was a "possibility".
Bmi reported a pre-tax profit of £2.1m for 2004, a return to the black after two years of losses including a £9.8m deficit in 2003. Group turnover grew in 2004 by 7.5 per cent, while passengers carried were 11 per cent up at 10.5 million.
Turning to the low-cost operation, bmibaby, Sir Michael hit out at his rival Michael O'Leary, the chief executive of Ryanair, who said in autumn last year that the sector faced a "bloodbath".
"When Michael O'Leary was talking about a bloodbath, we knew it did not reflect what was happening in the industry at that time. It was a piece of commercial spin, to intimidate competitors."
Sir Michael would not elaborate on this point, beyond saying the low-cost market had in fact "stabilised". Other industry sources suggested that the Ryanair chief executive was seeking to give the impression, to consumers, that smaller low-cost airlines were in danger of going bust - to put consumers off booking with them. Four of Europe's low-cost carriers went bust last year, out of a total of 62.
In 2004, bmibaby's performance improved considerably. It carried 3.2 million passengers, a 16 per cent increase on 2003. The load factor improved from 71 per cent to 78 per cent, while yield increased by 4.1 per cent - a trend, it said, that had continued into 2005.
By Michael Harrison and Saeed Shah
03 March 2005
The country's second biggest full-service scheduled airline, bmi, is close to making major changes to its European and domestic services from Heathrow in an effort to cut costs and compete more effectively with no-frills carriers.
The changes could involve the scrapping of separate business class compartments on board bmi aircraft although no final decisions have yet been taken.
Reporting financial results that showed a return to profit across the bmi group last year, the chairman, Sir Michael Bishop, said a comprehensive review of the Heathrow mainline operation was nearing completion and its conclusions would be implemented "shortly" with the aim of "significantly improving financial performance". The mainline operation accounts for about half bmi's £830m turnover.
Bmi operated a single-class cabin service until 1994 when it decided to introduce business class seating to compete more effectively with rival Heathrow operators such as British Airways. Since then, the growth of low-cost carriers such as Ryanair have changed the dynamics of European air travel. Although about half the passengers on bmi's Heathrow services travel on business, only a very small proportion fly in business class. Removing the curtain could generate big cost savings.
Nigel Turner, who instigated the review when he took over as bmi's chief executive last October, said moving to single-class cabins was a "possibility".
Bmi reported a pre-tax profit of £2.1m for 2004, a return to the black after two years of losses including a £9.8m deficit in 2003. Group turnover grew in 2004 by 7.5 per cent, while passengers carried were 11 per cent up at 10.5 million.
Turning to the low-cost operation, bmibaby, Sir Michael hit out at his rival Michael O'Leary, the chief executive of Ryanair, who said in autumn last year that the sector faced a "bloodbath".
"When Michael O'Leary was talking about a bloodbath, we knew it did not reflect what was happening in the industry at that time. It was a piece of commercial spin, to intimidate competitors."
Sir Michael would not elaborate on this point, beyond saying the low-cost market had in fact "stabilised". Other industry sources suggested that the Ryanair chief executive was seeking to give the impression, to consumers, that smaller low-cost airlines were in danger of going bust - to put consumers off booking with them. Four of Europe's low-cost carriers went bust last year, out of a total of 62.
In 2004, bmibaby's performance improved considerably. It carried 3.2 million passengers, a 16 per cent increase on 2003. The load factor improved from 71 per cent to 78 per cent, while yield increased by 4.1 per cent - a trend, it said, that had continued into 2005.
*j*
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From: UK
Presumably such a move would push prices up for other PAX to absorb the cost of the lack of business class at the front?
Interesting scenario and I wonder if such a thing were to happen if it'd be on all routes, or simply a selection. I wouldn't have thought all routes would revert to single class.
Anyone heard about one of the Fokker 100 a/c going to Brisbane, or have I got my wires crossed...?
Interesting scenario and I wonder if such a thing were to happen if it'd be on all routes, or simply a selection. I wouldn't have thought all routes would revert to single class.
Anyone heard about one of the Fokker 100 a/c going to Brisbane, or have I got my wires crossed...?
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From: England.
Sir Michael hit out at his rival Michael O'Leary, the chief executive of Ryanair, who said in autumn last year that the sector faced a "bloodbath".
"When Michael O'Leary was talking about a bloodbath, we knew it did not reflect what was happening in the industry at that time. It was a piece of commercial spin, to intimidate competitors."
"When Michael O'Leary was talking about a bloodbath, we knew it did not reflect what was happening in the industry at that time. It was a piece of commercial spin, to intimidate competitors."
Or where you waiting to see if you ended up bleeding before you engaged "boasting" mode?
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From: out of a suitcase
Far better to wait and make sure of the facts than to make claims that show you up as a buffoon later on (as you will know all to well acbus1 ). Who would Ryanair pilots find more trustworthy MOL or S M.B ?? (no prizes for this one!!)
Last edited by I.C.Nosignal; 4th March 2005 at 15:48.
