BMI
Join Date: May 2005
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While I would love to see a VS BMI merger to challenge BA I don't think it will happen.
VS is up to it's neck just trying to survive at the moment and I am not sure SQ is very happy with them; SRB will ensure VS survives I am sure but I don't think even he can raise the cash to take over and support BMI to profitability at present; of course he's not to be underestimated so I might be wrong.
So it looks like BA then!
VS is up to it's neck just trying to survive at the moment and I am not sure SQ is very happy with them; SRB will ensure VS survives I am sure but I don't think even he can raise the cash to take over and support BMI to profitability at present; of course he's not to be underestimated so I might be wrong.
So it looks like BA then!
Mach 3
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Cognizant of how lucrative LHR is, why would LH want to sell?
The potential cumulative cashflow from the business out of LHR will earn them far more in the long term than they will ever realize in the short term by selling...
Assuming they can turn it around and/or last through the credit crunch, selling the gift horse would be the last thing on my mind...
The potential cumulative cashflow from the business out of LHR will earn them far more in the long term than they will ever realize in the short term by selling...
Assuming they can turn it around and/or last through the credit crunch, selling the gift horse would be the last thing on my mind...
Join Date: Jul 2005
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Some things are never as simple as they first look!
BMI is not that lucrative an acquisition for LH. They wanted it in 2005 but now it is a corporate millstone. LH have just had their stock rating reduced to junk.
First BA would have to relinquish alot of the BMI slots but, lets be honest, they would drop those routes which clashed with rival BA SH flights so the potential 'revenue loss' would be minimal.
In the current climate where LH are buying up rivals throughout Europe whilst operating with 75-80% slots out of Frankfurt the ability of BA to acquire BMI is, probably, not too difficult. Despite the problems BA still have the cash to complete the purchase and, given the value of the LHR presence, could raise further funding if required. Add to that the ability to negotiate with destination airports to provide arrival slots which tie up with the departure slots from LHR to give fuel efficient flight times and you have an enticing business package.
What do Virgin bring to the table? SA want rid of their 50% and the airline is struggling to keep its head above financial water at the moment.
Whatever happens, I truly hope that the crews at BMI get a fair deal at the end of the day, whilst the managers might view us all as statistics at the bottom of a spreadsheet we all know better.
Good luck.
BMI is not that lucrative an acquisition for LH. They wanted it in 2005 but now it is a corporate millstone. LH have just had their stock rating reduced to junk.
First BA would have to relinquish alot of the BMI slots but, lets be honest, they would drop those routes which clashed with rival BA SH flights so the potential 'revenue loss' would be minimal.
In the current climate where LH are buying up rivals throughout Europe whilst operating with 75-80% slots out of Frankfurt the ability of BA to acquire BMI is, probably, not too difficult. Despite the problems BA still have the cash to complete the purchase and, given the value of the LHR presence, could raise further funding if required. Add to that the ability to negotiate with destination airports to provide arrival slots which tie up with the departure slots from LHR to give fuel efficient flight times and you have an enticing business package.
What do Virgin bring to the table? SA want rid of their 50% and the airline is struggling to keep its head above financial water at the moment.
Whatever happens, I truly hope that the crews at BMI get a fair deal at the end of the day, whilst the managers might view us all as statistics at the bottom of a spreadsheet we all know better.
Good luck.
I Have Control
Join Date: May 2004
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Let's try to get serious about business, not dreams
bmi and its constituent parts are likely to be sold for a quid, as was Dan Air. The outcome will be an asset-strip. Utterly predictable.
The sad thing about many comments above made by well-meaning enthusiasts are that they are naive. No money is being made from aviation today. Slots at LHR are not worth anything when the costs of operating them are taken into account, based on today's load factors. BA are not interested, and are in fact trying to offload slots at present.
The world has changed folks, for all of us, not just bmi. The unsavoury gent who offloaded his company onto LH was no fool. The industry is not profitable, has not been for 2-3 years, and will not be in the foreseeable future. Specific airlines will show a profit, however, but these will be a handful of lean and focussed companies, not debt-laden airlines operating out of a country with a doomed economy.
(probably peeing into the wind here, I know)
The sad thing about many comments above made by well-meaning enthusiasts are that they are naive. No money is being made from aviation today. Slots at LHR are not worth anything when the costs of operating them are taken into account, based on today's load factors. BA are not interested, and are in fact trying to offload slots at present.
The world has changed folks, for all of us, not just bmi. The unsavoury gent who offloaded his company onto LH was no fool. The industry is not profitable, has not been for 2-3 years, and will not be in the foreseeable future. Specific airlines will show a profit, however, but these will be a handful of lean and focussed companies, not debt-laden airlines operating out of a country with a doomed economy.
(probably peeing into the wind here, I know)
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Roy Hudd
Quite a change from your reference to Sir Michael Bishop on August 15th to the rather nasty "unsavory gent" description.
SMB has been responsible for the maintenance of thousands of decent airline jobs for many years and for this alone, he deserves great respect.
Suggest you go back to your Playstation and hamburger flipping or whatever you really do.
Quite a change from your reference to Sir Michael Bishop on August 15th to the rather nasty "unsavory gent" description.
SMB has been responsible for the maintenance of thousands of decent airline jobs for many years and for this alone, he deserves great respect.
Suggest you go back to your Playstation and hamburger flipping or whatever you really do.
Join Date: Nov 2005
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RH is so right - there's nothing here to buy except debt and labour severance pain...for an EEA carrier, who has no barrier to entry on any BMI Euro-route. They are "Open Skies", all aircraft are encumbered, all labour and Corporate/Agency revenue accounts are mobile. So, say, BA, cannot lock up Fortress LHR, nor control an EEA route, by buying BMI's slots, nor secure additional revenue by buying its Marketing team. (Long haul, esp.Saudi, has value). MO'L at Ryanair declined to buy GO for just this reason - he could cherry-pick their turf at will. Virgin could do the same tomorrow, open-recruit labour and beauty-parade the lessor industry for lift.
Now, for a non-EEA carrier, an Emirates, different...but they each have Alliance links, such that, say LH would be peeved if SQ-as-BMI moved onto its intra-EEA turf. Before the Fortress was breached last year by US, the aim of the excluded had been Fifth Freedom, such as Central Europe-LHR-Transatlantic. That's what BMI's slots, such as squatted for Middlesbrough, were for, and why SAS/LH bought into BM(then)A.
LH, now junk, has got themselves into a pickle with their acquisitions (as did SAS and Swissair). BMI is no more/no less important to them than are Austrian, SAS...Their obvious solution is a short haul fleet with some such branding as...Eurowings, and to Star brand all long haul except ex-FRA/HAM/MUC.
Now, for a non-EEA carrier, an Emirates, different...but they each have Alliance links, such that, say LH would be peeved if SQ-as-BMI moved onto its intra-EEA turf. Before the Fortress was breached last year by US, the aim of the excluded had been Fifth Freedom, such as Central Europe-LHR-Transatlantic. That's what BMI's slots, such as squatted for Middlesbrough, were for, and why SAS/LH bought into BM(then)A.
LH, now junk, has got themselves into a pickle with their acquisitions (as did SAS and Swissair). BMI is no more/no less important to them than are Austrian, SAS...Their obvious solution is a short haul fleet with some such branding as...Eurowings, and to Star brand all long haul except ex-FRA/HAM/MUC.
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Roy and tornadork.
Brilliant, pure brilliant. Never in the history of pprune have I seen two postings on the same page spouting such an inept grasp of what is happening within bmi. Please feel free to revisit this page when the powers that be come to a conclusion. I can assure you it will not entail .........
Actually I can't be bothered to even start picking apart either of your arguements, they are on reflection quite funny.
Brilliant, pure brilliant. Never in the history of pprune have I seen two postings on the same page spouting such an inept grasp of what is happening within bmi. Please feel free to revisit this page when the powers that be come to a conclusion. I can assure you it will not entail .........
Actually I can't be bothered to even start picking apart either of your arguements, they are on reflection quite funny.
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BA are not interested, and are in fact trying to offload slots at present.
When times are bad, people think this is how it will always be. Just as people do in the good times. Demand will return. If LH really is intent on selling BD, the directors of BA would be negligent in not giving the opportunity very serious consideration.
Before BA can think about intergrating another company, do they not still have the issue of 3,000 redundancies to sort out??? or has it just been dropped to be sorted another time and way???
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Before BA can think about intergrating another company, do they not still have the issue of 3,000 redundancies to sort out??? or has it just been dropped to be sorted another time and way???
But of course they would be taking on a struggling airline with its own problems which, on the face of it, aren't too different to BA's own problems (pension deficit, lack of business pax, increasing costs etc). So although these would add to BA's 'debt', its a case of whether the assets and potential value of the BD purchase can balance that out, leaving the larger BA in a relatively better position than where they are now.
Of course time will tell. I'm sure it'll be a while before anything major happens...
Mach 3
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I don't think anyone who has any experience of bmi and their accounting practices believes that they lost £100 million last year...
In any event, LH clawed back £75 million of that by settling on the courtroom steps didn't they?
In any event, LH clawed back £75 million of that by settling on the courtroom steps didn't they?
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bmi future ownership;
It is now reported that a German newspaper is saying that there are up to 12 interested parties for bmi.
So consider the following; Aer Lingus as a suitable buyer.
(Before there are 100 posts stating the obvious i.e. Aer Lingus couldnt afford,losing a fortune and all that etc etc., ignore all that and think of the following...)
AerLingus find a suitable backer (yes that's a challenge) to purchase bmi and bmibaby...
Would be (assuming was financially possible) great step for Aer Lingus and would give them some good bases quite quickly.
So consider the following; Aer Lingus as a suitable buyer.
(Before there are 100 posts stating the obvious i.e. Aer Lingus couldnt afford,losing a fortune and all that etc etc., ignore all that and think of the following...)
AerLingus find a suitable backer (yes that's a challenge) to purchase bmi and bmibaby...
- Aer Lingus merges with a similar sized company with a similar fleet of aircraft (exclusion bmibaby)(mainline has different engines and seating config!)
- Aer Lingus take over a competitor who is operating on their busiest route Dublin/Heathrow.
- Belfast/Heathrow would be without bmi on that route and they consolidate this route? (good assuming that BA stay away)
- Merge the 2 airlines and cut costs at Bmi outfit, in the same way as Aer Lingus did way back when they started to shape up against Ryanair (remember 'low fares, way better'). Re Costs yes realise AerLingus need to reduce in current climate.
- The use of the Aer Lingus head office function as a means to removing significant cost. no Duplication of roles etc where not necessary.
- Heathrow would provide a good base for the company with good feed from Irish originating traffic, give AerLingus a strong presence in the overall London market.
- Ryanair could not set up a base there.
- Aer Lingus returns to a global alliance, ie Star? unlikely One World.
- Do something good with bmibaby. Put a focus on Manchester as a base? Especially since Ryanair not getting a base there soon??
Would be (assuming was financially possible) great step for Aer Lingus and would give them some good bases quite quickly.
EI-Bud
Reminds me of the Alliance between MyAir and Sky Europe and how well that did.
Aside from the obvious of having to give up their slots at LHR to another competitor on competition concerns I kind of wonder where is the value in it.
Aer Lingus doesn't have the cash, neither does British Midland so who would put up the cash to ensure it happens. LH unlikely to sell cheaply if they can asset strip it rather than allowing someone else to do it.
Reminds me of the Alliance between MyAir and Sky Europe and how well that did.
Aside from the obvious of having to give up their slots at LHR to another competitor on competition concerns I kind of wonder where is the value in it.
Aer Lingus doesn't have the cash, neither does British Midland so who would put up the cash to ensure it happens. LH unlikely to sell cheaply if they can asset strip it rather than allowing someone else to do it.
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There's lots of outcomes as pilots we might wish for. Plenty of permutations that would have made sense last year, but now we are faced with today's reality.
Most (if not all) airlines are making an operating loss today.
Most (if not all) big ones are haemhorraging cash at one million/day.
Most did not top up their reserves with a profitable summer like they usually would have done. Most will have a worse winter, than the summer just past.
So which one has any cash left to take on another loss-making airline into their portfolio???
And if you work for one that might think about it, protest like mad quick because they're just spending the reserves that might otherwise protect your job by the end of the winter.
I think ROY HUDD might just be right: there is no value in a LHR slot for now; there is no one with any cash whose owner wants to lose more than he is already losing from his airline investments. Don't expect BA or VS to stump up money for the privilege. Nor EI, RYR, EZY, AF or KLM. They don't have spare cash and they won't be doing a rights issue for more.
I know the saying's as old as the hills and its boring but: "if you want to make a small fortune in aviation, start with a big one". It may be old but it's never more true than today.
I used to think big airlines were right collecting up smaller airlines like playing Monopoly - great to end up with all the blue and green set properties with hotels on all.
Lufthansa has just proved my theory wrong, and I don't think there are any other big players out there to contest it.
Hope I'm wrong though.
Most (if not all) airlines are making an operating loss today.
Most (if not all) big ones are haemhorraging cash at one million/day.
Most did not top up their reserves with a profitable summer like they usually would have done. Most will have a worse winter, than the summer just past.
So which one has any cash left to take on another loss-making airline into their portfolio???
And if you work for one that might think about it, protest like mad quick because they're just spending the reserves that might otherwise protect your job by the end of the winter.
I think ROY HUDD might just be right: there is no value in a LHR slot for now; there is no one with any cash whose owner wants to lose more than he is already losing from his airline investments. Don't expect BA or VS to stump up money for the privilege. Nor EI, RYR, EZY, AF or KLM. They don't have spare cash and they won't be doing a rights issue for more.
I know the saying's as old as the hills and its boring but: "if you want to make a small fortune in aviation, start with a big one". It may be old but it's never more true than today.
I used to think big airlines were right collecting up smaller airlines like playing Monopoly - great to end up with all the blue and green set properties with hotels on all.
Lufthansa has just proved my theory wrong, and I don't think there are any other big players out there to contest it.
Hope I'm wrong though.
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Any thought's?
Would be (assuming was financially possible) great step for Aer Lingus and would give them some good bases quite quickly
Would be (assuming was financially possible) great step for Aer Lingus and would give them some good bases quite quickly
1. you could say the same for alot of airlines
2. If EI make any attempt, I think MOL will out bid them.
I used to think big airlines were right collecting up smaller airlines like playing Monopoly - great to end up with all the blue and green set properties with hotels on all.
Lufthansa has just proved my theory wrong, and I don't think there are any other big players out there to contest it.
Lufthansa has just proved my theory wrong, and I don't think there are any other big players out there to contest it.
Then came 9/11 and it all went pear-shaped.
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At least BA is benefiting from bmi's uncertain future 
British Airways continued its flight higher, rising 9.75p to 237.25p after Goldman Sachs added the stock to its conviction list. Shares have gained over recent days on hopes of a deal being struck with its unions and that it could move to buy smaller rival BMI from German rival Lufthansa.
British Airways continued its flight higher, rising 9.75p to 237.25p after Goldman Sachs added the stock to its conviction list. Shares have gained over recent days on hopes of a deal being struck with its unions and that it could move to buy smaller rival BMI from German rival Lufthansa.