BMI
Join Date: Feb 2003
Location: East Midlands Airport (EMA)
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Obviously bmi are a buy-out target because of the Heathrow slots, this has always been the case, but particularly so since Open Skies was announced a few days ago, and this in unlikely to go away. Most likely the shareholders will drag out the bidding process until they get the highest possible bid, but I doubt we'll be hearing anything definite over the next few months. SMB has made no intentions that he is interested in selling, though SAS definitely are, and Lufthansa may well follow suit if the put option isn't exercised.
bmibaby is completely funded by SMB, it is a 100% owned subsidiary of his company, not bmi the airline division. As a result, they do not have the same huge access to funds that airlines like Ryanair or easyJet have. Despite that, in five years the airline has grown from 2 Boeing 737s and a Fokker 100 at EMA, to 21 Boeing 737s at four bases - compare this to the growth of easyJet between 1995 and 2000. bmi regional do well in their niche markets, and will continue to do so.
bmibaby is completely funded by SMB, it is a 100% owned subsidiary of his company, not bmi the airline division. As a result, they do not have the same huge access to funds that airlines like Ryanair or easyJet have. Despite that, in five years the airline has grown from 2 Boeing 737s and a Fokker 100 at EMA, to 21 Boeing 737s at four bases - compare this to the growth of easyJet between 1995 and 2000. bmi regional do well in their niche markets, and will continue to do so.
Join Date: Mar 2007
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So really bmibaby have been doing well for themselves it just hard to see it really with the low funds they get have turned themselves into one of the countries biggest low cost airlines..
They get my praise.
They get my praise.
Join Date: Mar 2005
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Baby may have done well in the past when looked at under certain criteria but look at what Jet2, Flybe and Globespan have done in the same time. It never really started with so few A/C anyway, how many Mainline crews flew around on option 1, 2 or 3 in BMI 737s/Fokkers?
Was MME a brilliant business decision? What about MAN? How many locos were there before Baby? How many are there now with more A/C than Baby? How many variations of CWL- GLA/PIK have there been in 4 years? When will the fabled CWL 4th A/C arrive if ever?
Why has there been no profit share this year when Easy and Ryan have increased profits in the same market conditions? Several pilots have left in the past partly because they can't see a long term future at Baby compared to Easy' or Ryan'.
Was MME a brilliant business decision? What about MAN? How many locos were there before Baby? How many are there now with more A/C than Baby? How many variations of CWL- GLA/PIK have there been in 4 years? When will the fabled CWL 4th A/C arrive if ever?
Why has there been no profit share this year when Easy and Ryan have increased profits in the same market conditions? Several pilots have left in the past partly because they can't see a long term future at Baby compared to Easy' or Ryan'.
Join Date: Apr 2002
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From Aviation Interactive today:
"British Airways has acquired 102 weekly takeoff and landing slots at London Heathrow from fellow British carrier bmi. The £30m purchase will support future growth of BA at its global hub. The deal, which will ensure seven or eight extra flights per day by BA, boosts the British flag carrier’s share of total Heathrow slots to 41.4 per cent. Most of the slots relinquished by bmi belonged to its loss-making subsidiary BMed."
I don't understand this business anymore - maybe I never did. But bmi buys BMED, in part for its valuable slots, for £30m . . and then sells the slots to BA for £30m leaving it with what exactly? And this at a time when bmi can finally begin to think about flying LHR - N America and presumably needs all the slots it can get! Nope - I just don't understand this business anymore. . .
"British Airways has acquired 102 weekly takeoff and landing slots at London Heathrow from fellow British carrier bmi. The £30m purchase will support future growth of BA at its global hub. The deal, which will ensure seven or eight extra flights per day by BA, boosts the British flag carrier’s share of total Heathrow slots to 41.4 per cent. Most of the slots relinquished by bmi belonged to its loss-making subsidiary BMed."
I don't understand this business anymore - maybe I never did. But bmi buys BMED, in part for its valuable slots, for £30m . . and then sells the slots to BA for £30m leaving it with what exactly? And this at a time when bmi can finally begin to think about flying LHR - N America and presumably needs all the slots it can get! Nope - I just don't understand this business anymore. . .
Join Date: Feb 2003
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bmi gets from BMED exclusive route access to a number of high yielding markets along with the aircraft and crew to operate them. bmi then sells the surplus of slots that they don't need, admittedly at a very low price which I'm unsure about, to make sure they don't need to operate a number of loss-making slot warmers.
Join Date: Apr 2002
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But, as I understand it, BMED were losing money on pretty much every service operated which is why they were up for sale. And, surely, bmi could have leased out the slots (or something) until they needed them for US services?
Join Date: May 2006
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Torquelink
This doesnt make sense to me either, if the press are correct. It would be interesting to find out how many slots BMED actually had to start off with. I thought the purchase by BMI was a steal at £30 mill. They get the aircraft, the exclusive route licences and the slots of Bmed- probably the most valuable part, but then to apparently sell them at what looks like a huge discount on the £5-£10 million per set that has been quoted widely as being the asking price for peak time slots and to your biggest rival that your hoping to now compete with in the transatlantic market that is now opened up because of open skies does seem rather strange.
Even if the Bmed routes are loss making, surely the slots could have been used to introduce new long haul routes or to sell them to an alliance partner like Lufthansa for example?!
I wonder if there is more to this than meets the eye
This doesnt make sense to me either, if the press are correct. It would be interesting to find out how many slots BMED actually had to start off with. I thought the purchase by BMI was a steal at £30 mill. They get the aircraft, the exclusive route licences and the slots of Bmed- probably the most valuable part, but then to apparently sell them at what looks like a huge discount on the £5-£10 million per set that has been quoted widely as being the asking price for peak time slots and to your biggest rival that your hoping to now compete with in the transatlantic market that is now opened up because of open skies does seem rather strange.
Even if the Bmed routes are loss making, surely the slots could have been used to introduce new long haul routes or to sell them to an alliance partner like Lufthansa for example?!
I wonder if there is more to this than meets the eye
Join Date: Apr 2002
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Exactly Uklad, it does makes one wonder what's really going on. Within the last 48 hours there have been rumours of BA buying bmi (if the MMC would let it happen), BA buying Iberia (or selling their existing stake in Iberia - having bought AA's Iberia stake only a year or so ago), bmi buying GB etc etc. All very confusing. But I'm sure that we can all rest easy in the knowledge that the highly paid senior management of these airlines know exactly what they are doing and have well thought out, detailed, plans which they are putting smoothly into practice.
Join Date: Nov 2006
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If you look at the press releases from today, it makes a different picture.
BMI sold slot pairs to BA. The slots are the BMed ones according to the statement. So by the look of it, BMI are cashing some slots in from services they are discontinuing (frequency changes or routes being pulled) and using their own slots for the BMed routes.
The BA codeshare is being extended on the BMed routes after the franchise is due to expire, with aircraft and uniforms changing to BMI.
So BMI must have got a good deal overall. BA doesn't exercise its right to block BMed being sold, BMI gets the codeshare deal, and BMI's surplus "use or lose" slots go to someone who isn't a predatory third party wanting to move in under Open Skies.
BMI sold slot pairs to BA. The slots are the BMed ones according to the statement. So by the look of it, BMI are cashing some slots in from services they are discontinuing (frequency changes or routes being pulled) and using their own slots for the BMed routes.
The BA codeshare is being extended on the BMed routes after the franchise is due to expire, with aircraft and uniforms changing to BMI.
So BMI must have got a good deal overall. BA doesn't exercise its right to block BMed being sold, BMI gets the codeshare deal, and BMI's surplus "use or lose" slots go to someone who isn't a predatory third party wanting to move in under Open Skies.
Join Date: Dec 2000
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Apologies if I'm missing something, but in addition to the peculiarities of giving up 51 departures a week, at the time of purchase bmi stated that they were keeping the BMed fleet. Without these 51 LHR departures, surely that means either a signicant number of shorthaul bmi flights are going to disappear in favour of longer ones (ie average sector length will increase) or there are going to be a lot of A320/1s standing idle or moving base to another airport instead.
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"surely that means either a signicant number of shorthaul bmi flights are going to disappear in favour of longer ones (ie average sector length will increase) or there are going to be a lot of A320/1s standing idle or moving base to another airport instead."
...or being sold or leased out to other airlines...there's not exactly a glut of A320/1 a/c out there for those who like them
...or being sold or leased out to other airlines...there's not exactly a glut of A320/1 a/c out there for those who like them
Join Date: May 2006
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2 questions start to float around my head. If BA will get the slots then does that mean they could start up new routes? On the other hand what routes would bmi pull?
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bmi BFS/BHD
Word on the street is that bmi are in talks with BFS about moving half of their LHR flights to BFS from BHD, to start as early as March 08! Currently being discussed on the Belfast-2 forum.
Join Date: Nov 2004
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The whole Heathrow slot situation is ludicrous.
They've got aircraft operating empty or tiny aircraft operating with miniscule passenger loads, just to keep their slot rights.
They've got airlines making millions out of selling something which isn't theirs to sell (shouldn't be theirs to sell).
What happened to fair competition and survival of the fittest? Make airlines justify their use of slots by monitoring their passenger loads. Any under achievers get booted off their slot. That's how utilisation will improve!
The current situation stifles competition and is commercial madness!
They've got aircraft operating empty or tiny aircraft operating with miniscule passenger loads, just to keep their slot rights.
They've got airlines making millions out of selling something which isn't theirs to sell (shouldn't be theirs to sell).
What happened to fair competition and survival of the fittest? Make airlines justify their use of slots by monitoring their passenger loads. Any under achievers get booted off their slot. That's how utilisation will improve!
The current situation stifles competition and is commercial madness!
Join Date: Jul 2005
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And the Chapter 11 protection of bankrupt US airlines doesn't? Along with many other inequities within the industry.
I agree there should be a level playing field.
Unfortunately the Big Boys in the industry will strongly disagree with anything that appears to infringe on their "turf", and will work very hard to prevent it happening.
I agree there should be a level playing field.
Unfortunately the Big Boys in the industry will strongly disagree with anything that appears to infringe on their "turf", and will work very hard to prevent it happening.
Putting several bits of information together:
51 slots per week at LHR sold to bmi
BMI Regional planning expansion later this year
Several BMI Regional E145s currently used on services to LHR
E145s progressively used on routes with low traffic volume, which are presumably not profitable for operation on the 319/320.
51 curiously equals the number of Heathrow-Hannover, Heathrow-TeesSide and the extra evening Heathrow-Leeds services operated per week, all of which are flown by Regional Embraers.
Chop those services, free up the Embraers for the bmi regional expansion and hey presto, you've released enough slots to cover the entire BMed operation and still sell BMed's slots to BA.
I might be adding 2+2+2 and getting 381 here, but I suspect I'm not far off what will actually happen. They surely cannot be intending to operate Embraers into LHR as a long-term business plan.
Note: Although LHR-ABZ has a high proportion of Embraer service, it's unlikely that it would be up for the chop. Quite a few of the BMed routes (Baku and Bishkek in particular) have a high dependence on the oil industry and so it is likely that moving these longer routes into the bmi network will see an increase in connecting traffic on BD's LHR-ABZ route.
51 slots per week at LHR sold to bmi
BMI Regional planning expansion later this year
Several BMI Regional E145s currently used on services to LHR
E145s progressively used on routes with low traffic volume, which are presumably not profitable for operation on the 319/320.
51 curiously equals the number of Heathrow-Hannover, Heathrow-TeesSide and the extra evening Heathrow-Leeds services operated per week, all of which are flown by Regional Embraers.
Chop those services, free up the Embraers for the bmi regional expansion and hey presto, you've released enough slots to cover the entire BMed operation and still sell BMed's slots to BA.
I might be adding 2+2+2 and getting 381 here, but I suspect I'm not far off what will actually happen. They surely cannot be intending to operate Embraers into LHR as a long-term business plan.
Note: Although LHR-ABZ has a high proportion of Embraer service, it's unlikely that it would be up for the chop. Quite a few of the BMed routes (Baku and Bishkek in particular) have a high dependence on the oil industry and so it is likely that moving these longer routes into the bmi network will see an increase in connecting traffic on BD's LHR-ABZ route.
Join Date: Oct 2005
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Does anyone know why BD are starting to retire their A320s? Jethro's website is showing G-MIDW, one of the Star Alliance ones, as WFU, are they considering these birds too big as well as the A321s?
Very annoying, I was hoping to see their A320s in the new Star Alliance livery, as well as G-MIDY/Z in the new livery as well.
Very annoying, I was hoping to see their A320s in the new Star Alliance livery, as well as G-MIDY/Z in the new livery as well.
Join Date: Jul 2005
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FAO Chrism20
Reference the diamond club, yes it was announced with the new business package that baby launched a month or so ago to big it up a bit more!!
Everyone is asking the same question at EMA and there are alot of pax interested in diamond club....
From what ive heard it shall be a couple of months yet though before it is all intergrated..... Will be interesting though how it all works from an operational point of view with regards to adding the points etc
Reference the diamond club, yes it was announced with the new business package that baby launched a month or so ago to big it up a bit more!!
Everyone is asking the same question at EMA and there are alot of pax interested in diamond club....
From what ive heard it shall be a couple of months yet though before it is all intergrated..... Will be interesting though how it all works from an operational point of view with regards to adding the points etc