BA ready to bid for BMI to expand at Heathrow
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BA ready to bid for BMI to expand at Heathrow
Interesting article in today's Telegraph.
BA ready to bid for BMI to expand at Heathrow - Daily Telegraph
BA ready to bid for BMI to expand at Heathrow - Daily Telegraph
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IAG is not interested in bidding for all of BMI – it is already considering an offer for TAP, the Portuguese airline – but is ready to negotiate. An IAG official said: "He has made it very clear we are interested in BMI in terms of slots. The ball is now in Lufthansa's court."
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The article states BA only want the slots, so i fear it would not mean a ticket into BA for the crews. Unfortunately with BAA not being able to expand Heathrow, slots are going to be like gold and open to the highest bidder, even if that means some casualties on the way 
It's only a newspaper article, so the chances are it's not very accurate.
Of course slots are a major driver for BA, but do not lose sight of the reality that BA would like to see a competitor removed from the scene and under its control. It also needs space and capacity if it is to expand at LHR and T5 is not enough.
And you can't just buy slots and hoard them. You have to fly them or lose them. So unless the slots are sold piecemeal to a large number of purchasers , any airline buying the whole slot package without the rest of the assets would have to find rather quickly a large number of aircraft and crews. If BA is the purchaser they can continue to run BMI but absorb it into mainstream BA as quickly as possible, gaining from synergies BA (and probably noone else) could achieve, in this way alleviating the ongoing losses incurred from BMI.
Whether this is financially worthwhile is the calculation BA will have to make and will depend on the deal they strike with DLH, if indeed DLH are prepared to go this route, and the proportion of the slots they are allowed to keep by DLH and the regulators.
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Of course slots are a major driver for BA, but do not lose sight of the reality that BA would like to see a competitor removed from the scene and under its control. It also needs space and capacity if it is to expand at LHR and T5 is not enough.
And you can't just buy slots and hoard them. You have to fly them or lose them. So unless the slots are sold piecemeal to a large number of purchasers , any airline buying the whole slot package without the rest of the assets would have to find rather quickly a large number of aircraft and crews. If BA is the purchaser they can continue to run BMI but absorb it into mainstream BA as quickly as possible, gaining from synergies BA (and probably noone else) could achieve, in this way alleviating the ongoing losses incurred from BMI.
Whether this is financially worthwhile is the calculation BA will have to make and will depend on the deal they strike with DLH, if indeed DLH are prepared to go this route, and the proportion of the slots they are allowed to keep by DLH and the regulators.
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Last edited by Tagron; 12th Sep 2011 at 12:27.
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Good point Spitfire.....
If a bid is successful I can see the LGW longhaul ops going over to LHR and the SH ops being offered as a sweetener to the likes of Flybe in order to appease the regulatory/competition issues.
It would also relieve BA of the forthcoming problems of having to go to the expense of replacing the ageing 737 fleet.LGW is now run as a separate business unit by BA,as were the regions before their sale to Flybe.
This must seem an attractive proposition to BA not just for the slots at LHR but also for the cost savings in closing LGW.
If a bid is successful I can see the LGW longhaul ops going over to LHR and the SH ops being offered as a sweetener to the likes of Flybe in order to appease the regulatory/competition issues.
It would also relieve BA of the forthcoming problems of having to go to the expense of replacing the ageing 737 fleet.LGW is now run as a separate business unit by BA,as were the regions before their sale to Flybe.
This must seem an attractive proposition to BA not just for the slots at LHR but also for the cost savings in closing LGW.
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New routes take years to become profitable so i would envisage BA expanding capacity it already has with new(probally leased) aircraft.
BA has hundreds of type rated crew banging on the door at the moment so could ramp up fairly quickly if need be.Why take on liabilites it dosn't need ?
BA has hundreds of type rated crew banging on the door at the moment so could ramp up fairly quickly if need be.Why take on liabilites it dosn't need ?
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I think if ba were to be the purchaser of mainline, ie the Lhr slots, the only people that might be kept on in the whole would be the crews. As has been stated earlier the slots must be flown. BA is in a recruitment mode. BMI mainline will not be allowed to fold as this would result in the loss of the slots. BA would have a hard time arguing that the crew positions were redundant at the same time as having recruited a few hundred new pilots and a thousand odd cabin crew.
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Why would any potential buyer want to sell off all the Heathrow slots and then be left with a load of crews kicking around? Then what? Doesn't sound very appealing to me.
No doubt Competition commission would be crawling all over a BA bid..........oh wait its BA so therefore anything goes. if they get bought by Jonny Foreigner in which case there are loads of competition issues.
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No doubt Competition commission would be crawling all over a BA bid..........oh wait its BA so therefore anything goes. if they get bought by Jonny Foreigner in which case there are loads of competition issues.
A BA bid would face competition enquiries. Meanwhile LH has been able to gobble up carriers all over Europe.
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Does anyone know a rough figure of how many LHR slots BA actually owns? Due to the size of their operation out of there I bet it is a right monopoly. And I guess it opens up the question; why is Heathrow such a popular base for airlines? These days more and more airports are looking desirable with improved transport links and so on, the only real difference I can see compared to the likes of Gatwick / Luton / Stansted is that it is on the tube.
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Does anyone know a rough figure of how many LHR slots BA actually owns? Due to the size of their operation out of there I bet it is a right monopoly. And I guess it opens up the question; why is Heathrow such a popular base for airlines? These days more and more airports are looking desirable with improved transport links and so on, the only real difference I can see compared to the likes of Gatwick / Luton / Stansted is that it is on the tube.
BD's share of slots at LHR has now fallen to about 8% after LH group has extracted slots so even if BA acquired BD without divesting slots its share would still be barely above 50%.
BA acquiring BD would enable new routes to be launched with the slots (China in particular) which will make LHR more competitive against other hubs so I don't see what is detrimental to the consumer interest.
As for LHR a lot of US inbounds are located in the Reading/Thames Valley area making LHR very convenient. It's network for business travellers also perpetuates its popularity and any other London airport would struggle to ever replicate this.
Where does that leave the working crews of BMA in terms of continued employment, seniority and pensions?
the only people that might be kept on in the whole would be the crews.
BA (and many others) are very short of qualified engineers.
BMI's A320 LAEs would be very welcome at LHR.
Good luck to em I say, they're going to need it.
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I think you may find Bmi engineering is a separate and profitable entity now. Lufthansa is unlikely to want to off load it unless a significant offer is made. In other words the engineering dept is probably the safest of all
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Indeed the bmi engineers all have Lufthansa Technik approvals & now do all of the Lufthansa group line maintenance at LHR.
I expect a deal to be finalized around the opening of the new T2 at LHR. I would expect bmi Engineering Ltd to be absorbed it Lufthansa Technik, the customer service staff along with Menzies to become the main handling agent for T2 & what is left of mainline to be sold to BA following a rather painful downsizing & asset (slot) stripping process by Lufthansa.
I wouldn't be surprised to see Regional retained in some form to link UK regional airports to FRA.
As for baby, I can't see any of the LHR carriers being interested so probably a wholesale disposal to one of the low cost carriers.
I expect a deal to be finalized around the opening of the new T2 at LHR. I would expect bmi Engineering Ltd to be absorbed it Lufthansa Technik, the customer service staff along with Menzies to become the main handling agent for T2 & what is left of mainline to be sold to BA following a rather painful downsizing & asset (slot) stripping process by Lufthansa.
I wouldn't be surprised to see Regional retained in some form to link UK regional airports to FRA.
As for baby, I can't see any of the LHR carriers being interested so probably a wholesale disposal to one of the low cost carriers.
TartinTon
Not sure why you think it's the busiest airport in the world
Not sure that's true either nowadays, think the likes of Frankfurt, Schipol aren't far away ( and UK passenger duty is possibly driving lots of connecting traffic away from the UK anyway, but that's a different story)