BMI
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I've noticed that the loads on quite a few BMI European flights are very low indeed. Am wondering if this is some kind of strategy to drive the sale value down?
The trouble is that Virgin is all for more competition - as long as it is them that provide it!
In every sphere that the Virgin brand operate they moan and complain at every turn of the coin.
I remember when they set up Virgin Radio 'The Bearded One' was demanding that the BBC gave up some of their FM frequencies.
They complained about Pepsi and Coke with the Virgin Cola.
And MATES sent someone around to the DUREX factory with a pin
In every sphere that the Virgin brand operate they moan and complain at every turn of the coin.
I remember when they set up Virgin Radio 'The Bearded One' was demanding that the BBC gave up some of their FM frequencies.
They complained about Pepsi and Coke with the Virgin Cola.
And MATES sent someone around to the DUREX factory with a pin
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IAG have yet to conclude the deal so its still anyones to buy.
Virgin might look at this deal as a way of cheaply increasing its own value before putting itself up for sale next year.
Virgin might look at this deal as a way of cheaply increasing its own value before putting itself up for sale next year.
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I have to curse Virgin, not interested initially then limply coming to the table at the last second more in protest with BA/IAG than real interest perhaps.
All that has done is make the poor workforce of BMI/Baby have to wait even longer.
Have crossed out flying with Virgin next year
Nigel
All that has done is make the poor workforce of BMI/Baby have to wait even longer.
Have crossed out flying with Virgin next year
Nigel
As many are aware, while Virgin are coping at the moment and not in any serious danger right now, Virgin is not having a brilliant time with regards to recent financial results.
Suppose Virgin win the bid for bmi. One of three scenarios would likely then ensue:
a - Virgin manage to turn bmi around and absorb it into their operation without too many problems
b - Virgin has difficulty absorbing bmi, but it all works out eventually
c - Virgin realises they have bitten off far more than they can chew, and face serious financial problems.
If scenarios a or b happen, then all is OK.
Under scenario c, what happens next ?
Suppose Virgin win the bid for bmi. One of three scenarios would likely then ensue:
a - Virgin manage to turn bmi around and absorb it into their operation without too many problems
b - Virgin has difficulty absorbing bmi, but it all works out eventually
c - Virgin realises they have bitten off far more than they can chew, and face serious financial problems.
If scenarios a or b happen, then all is OK.
Under scenario c, what happens next ?
Last edited by davidjohnson6; 12th Dec 2011 at 20:03.
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If scenarios a or b happen, then all is OK.
Under scenario c, what happens next ?
Under scenario c, what happens next ?
Virgin will not, and could not, go this alone. A tie up with a Middle Eastern outfit would be most likely and not to the liking of AIG or Lufty. So the other option would be for Lufty to keep a share in BMI, or even buy a share of VA. This type of deal was thought to be on the cards a few years ago.
What ever the outcome, i hope it's sorted soon, and wish all at BMI well.
What ever the outcome, i hope it's sorted soon, and wish all at BMI well.
Last edited by xray one; 13th Dec 2011 at 06:10.
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I understood that Etihad were sniffing around Astreaus a couple of months ago, so maybe this could be a quick route into the UK as it was alleged that they were interested in starting a UK operation?
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The various articles and business news bulletins that I have read suggest that it is SIA that are funding this bid through VS, SIA are of course a star airline and in acquiring bmi VS would likely become a star partner airline.
A deal with VS would probably attract less completion scrutiny than a IAG deal and therefore likely to be completed much more quickly, bmi is probably loosing £15+m a month in winter all of which is on DLH group accounts so even selling bmi to VS for half the reported IAG figure makes sense if it can be completed quickly and that is before you take any strategic value of star at LHR.
Selling to IAG would weaken star at LHR conversely brining Virgin into star at LHR would weaken BA.
I suspect DLH will make a choice before the end of this month, I think Virgin could win this unless IAG are willing to pay a substantial premium.
Whoever wins this battle could the loose the war! there seems to be little money to be made on short haul European flying these days and only BA have the international network to take advantage of extra slots and absorb bmi 319/20/21 into their short haul or LGW fleets or Iberia low cost start up.
Where would virgin get suitable aircraft from? There is a world wide shortage of 330's no chance of 380's, 777 would require expensive and time consuming re training ditto 747 although there are probably ex pats in the sand pit that would head West!
A deal with VS would probably attract less completion scrutiny than a IAG deal and therefore likely to be completed much more quickly, bmi is probably loosing £15+m a month in winter all of which is on DLH group accounts so even selling bmi to VS for half the reported IAG figure makes sense if it can be completed quickly and that is before you take any strategic value of star at LHR.
Selling to IAG would weaken star at LHR conversely brining Virgin into star at LHR would weaken BA.
I suspect DLH will make a choice before the end of this month, I think Virgin could win this unless IAG are willing to pay a substantial premium.
Whoever wins this battle could the loose the war! there seems to be little money to be made on short haul European flying these days and only BA have the international network to take advantage of extra slots and absorb bmi 319/20/21 into their short haul or LGW fleets or Iberia low cost start up.
Where would virgin get suitable aircraft from? There is a world wide shortage of 330's no chance of 380's, 777 would require expensive and time consuming re training ditto 747 although there are probably ex pats in the sand pit that would head West!
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in acquiring bmi VS would likely become a star partner airline.
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Was speaking to a ground engineer, he was saying that the deal will be signed off on Friday and Virgin will get Mainline. God knows where these guys get their intel.
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IMHO there is absolutely no chance whatsoever of Virgin buying BMI. That then begs the question of why they are sticking their nose in at all? There are at least a couple of plausible scenarios outlined in previous posts.
If Virgin actually DID buy BMI, it would likely result in carnage for both workforces, because they can't afford it, and they can't turn it round without sustaining massive losses!! (Why on earth would SQ want to chuck good money after bad? and DLH have absolutely no appetite for allowing any mid east carrier into their own backyard!)
As it is, BMI could also be a poison chalice for the workforce of BA/IAG!
All will be revealed soon enough, in the meantime, enjoy Christmas!
If Virgin actually DID buy BMI, it would likely result in carnage for both workforces, because they can't afford it, and they can't turn it round without sustaining massive losses!! (Why on earth would SQ want to chuck good money after bad? and DLH have absolutely no appetite for allowing any mid east carrier into their own backyard!)
As it is, BMI could also be a poison chalice for the workforce of BA/IAG!
All will be revealed soon enough, in the meantime, enjoy Christmas!
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The big fall of BMI is lack of long haul connections at LHR. I think you're all being blinded a little. If Virgin do gain BMI, there is actually better chance of a success story than an IAG merger. Virgin has its on financial muscle behind it. The beast created by the merger could be quite a substantial one, which stands a fighting chance against BA. Strip away a lot of the med haul stuff and connect where needs to be connected from LHR to eastern and central Europe and integrate a much bigger long haul beast due to the access to slots.
I would say Virgin has a good chance of turning BMI around in two to three years. They just need to suck it in for a while.
I would say Virgin has a good chance of turning BMI around in two to three years. They just need to suck it in for a while.
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Where would bmi connect to? Revamp / drop med haul again? Which routes? Head to head with STAR and IAG and somehow this mad strategy loses less money than today? Honestly JCSL, name three short haul routes bmi could launch from LHR? They got out of all the core markets years ago. Back to AMS, CDG, BRU? How about MAD? LIS is covered by TP, Greece by Aegean both STAR partners. Maybe not, VIE? OS on there, ZRH/GVA covered by SWISS, nowhere German seems likely..... Once you get specific, it's hard to see what markets bmi could realistically feed VS from!
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Eastern Europe, underserved by LHR. If there was a potential feeder route network that could work, including some eastern Europe destinations would work.
I would never suggest BMI try in core locations like MAD, CDG, BRU etc.... Virgin whether it be Group or Atlantic can make BMI work, lots will be stripped for long haul either way, but it's going to stand a better chance (for jobs moreso) in Virgin hands.
SRB is used to running Virgin branded co's at a loss for 3-5 years to make them work in the long run.
I would never suggest BMI try in core locations like MAD, CDG, BRU etc.... Virgin whether it be Group or Atlantic can make BMI work, lots will be stripped for long haul either way, but it's going to stand a better chance (for jobs moreso) in Virgin hands.
SRB is used to running Virgin branded co's at a loss for 3-5 years to make them work in the long run.
Granted, Poland, Czech Rep, Slovakia, Hungary, the Baltic 3 and the former Yugoslavia have relatively few long haul flights given the number of people who live there. Let us suppose for the moment there is a pent-up demand for long haul flying from these countries. Let us also suppose that there is significant London-E. Europe demand which doesn't already use or doesn't want to use Wizzair from LTN (169 flights per week from LTN in May 2012 excluding beach cities) or Ryanair from STN.
For someone living in a large city in central / east Europe, what advantage would a combined bmi / Virgin have compared to AF-KL or LH ? AF and LH groups already have more routess at a higher frequency currently in place than VS-BD would ever manage, and neither MUC, FRA, PAR or AMS is exactly short of long haul flights. Flying from eastern Europe to major airports in Asia via LHR is pointless compared to flying via MUC / FRA - adds an hour flying time each way. If VS-BD were to try to serve the eastern Europe - transatlantic market, I suspect LH+LX+OS / AF-KL would just walk all over them.
For someone living in a large city in central / east Europe, what advantage would a combined bmi / Virgin have compared to AF-KL or LH ? AF and LH groups already have more routess at a higher frequency currently in place than VS-BD would ever manage, and neither MUC, FRA, PAR or AMS is exactly short of long haul flights. Flying from eastern Europe to major airports in Asia via LHR is pointless compared to flying via MUC / FRA - adds an hour flying time each way. If VS-BD were to try to serve the eastern Europe - transatlantic market, I suspect LH+LX+OS / AF-KL would just walk all over them.
Last edited by davidjohnson6; 13th Dec 2011 at 23:55.
