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So you are suggesting because CDG, AMS and FRA exist - tring to compete on routes shouldn't happen? if that were the case. BA would be down the swanny. BA already competes on a lot of the routes also available from those three other EU hubs, no reason a VS/BD tie up can't compete also.
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So you are suggesting because CDG, AMS and FRA exist - tring to compete on routes shouldn't happen? if that were the case. BA would be down the swanny. BA already competes on a lot of the routes also available from those three other EU hubs, no reason a VS/BD tie up can't compete also.
A VS/BD tie-up would be starting from scratch with zero sales presence in those Central/Eastern European markets and an array of competitors more than happy to make life hard for them. Plus - as I've said before - to get reasonable connections to/from VS long-haul, you need 2, probably 3 flights a day on the short-haul network. That's a lot of capacity to suddenly throw into secondary markets.
You assert that
Virgin has its on financial muscle behind it
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So you are suggesting because CDG, AMS and FRA exist - tring to compete on routes shouldn't happen?
no reason a VS/BD tie up can't compete also
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Regarding connections to VS long haul, another complicating factor that VS long haul departures are spread right across the day so to offer competitive short-haul connections you need a good level of frequency on every feeder route, which could bleed millions in cash.
Virgin also does not have deep pockets. They rarely stump up much of their own cash. Any deal will be financed by someone else, and that won't be SQ.
Virgin may find a willing financier, but in the absence of any guaranteed financial return or brand recognition, I can't see what would be in it for them.
Virgin also does not have deep pockets. They rarely stump up much of their own cash. Any deal will be financed by someone else, and that won't be SQ.
Virgin may find a willing financier, but in the absence of any guaranteed financial return or brand recognition, I can't see what would be in it for them.
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All very interesting, but..
If we start with what's known:
DLH. Put the bmi group up for sale, both IAG & VS expressed an interest, meanwhile bmi regional is sold to Granite aviation ( STC) DLH sign a none binding agreement to sell to IAG again STC , VS return with new offer and DLH sign a sale agreement with them also, both IAG & VS are share sale transaction to buy 100% of the bmi group ie including bmibaby & bmi regional but both aware that bmir & baby are in talks with other buyers.
So why would DLH consider VS new bid as serious after having agreed a sale STC with IAG? Why would VS go back with a new offer, but still reported as 50% of what IAG and why would DLH sign a sale agreement allowing VS to carry out DD, banks and advisors fee's will run into millions for VS so one has to assume it's not show boating.
My own view is that VS & DLH suspect that the IAG deal could get called in by the CC the VS should face no such worries and DLH want shut of bmi before year end, the IAG deal could take 6 months or more if called in and might fail if the CC put a requirement on IAG to release slots to other parties over concerns about Scottish air links and a BA monopoly on those routes.
All things being equal( but there not!) I would think DLH would prefer a sale to VS over arch rival BA/ IAG. So could go either way and too close to call, but getting off the fence I'd go 51/49 in VS favour simply because the delay cost risk is much lower and I think the bmir & baby sale will go ahead whoever DLH sign with.
DLH. Put the bmi group up for sale, both IAG & VS expressed an interest, meanwhile bmi regional is sold to Granite aviation ( STC) DLH sign a none binding agreement to sell to IAG again STC , VS return with new offer and DLH sign a sale agreement with them also, both IAG & VS are share sale transaction to buy 100% of the bmi group ie including bmibaby & bmi regional but both aware that bmir & baby are in talks with other buyers.
So why would DLH consider VS new bid as serious after having agreed a sale STC with IAG? Why would VS go back with a new offer, but still reported as 50% of what IAG and why would DLH sign a sale agreement allowing VS to carry out DD, banks and advisors fee's will run into millions for VS so one has to assume it's not show boating.
My own view is that VS & DLH suspect that the IAG deal could get called in by the CC the VS should face no such worries and DLH want shut of bmi before year end, the IAG deal could take 6 months or more if called in and might fail if the CC put a requirement on IAG to release slots to other parties over concerns about Scottish air links and a BA monopoly on those routes.
All things being equal( but there not!) I would think DLH would prefer a sale to VS over arch rival BA/ IAG. So could go either way and too close to call, but getting off the fence I'd go 51/49 in VS favour simply because the delay cost risk is much lower and I think the bmir & baby sale will go ahead whoever DLH sign with.
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I suspect the reason for Virgin being late to the party is because of securing financing. No one knows just how solid the financing is, bearing in mind due diligence has not completed. Bearing in mind the VS offer is reported to be 50% of the IAG bid suggests it isn't backed with unlimited cash
LH is of course happy to entertain an offer from VS as it strengthens its negotiating position with IAG.
Due diligence is expensive but even if Virgin aren't successful they will acquire knowledge of bmi's business and markets which will have some ongoing value to the business.
LH is of course happy to entertain an offer from VS as it strengthens its negotiating position with IAG.
Due diligence is expensive but even if Virgin aren't successful they will acquire knowledge of bmi's business and markets which will have some ongoing value to the business.
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The only reason VS are bidding at half the price of IAG is so they can mount a PR offensive saying "Look at us fighting against big bad BA who have gobbled up poor BMI in an unfair manner" when Lufty sell to IAG. Can you imagine the colour of Steve Ridgeway's face if he really had to turn around BMI, something Lufthansa wasn't even close to doing?
How many connecting passengers will be jumping on VS transatlantic from BD mid-haul? Part of me almost wants VS to win as finally they'd have to deliver on a contract rather a press release for once.
How many connecting passengers will be jumping on VS transatlantic from BD mid-haul? Part of me almost wants VS to win as finally they'd have to deliver on a contract rather a press release for once.
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Virgin don't want bmi. They couldn't turn it around or absorb it without massive, massive investment from the Middle East, over several years. Would Lufthansa want those very very deep pockets with such a slot foothold in Europe? There may be some routes they'd like, but 'wishing' is very different from 'doing'. Anyway, the routes they might like wouldn't use much of the slot portfolio.
They do want the slots on the cheap though.
The plan for a substantial feeder network is again a misnomer. They've been at LHR for years. Plenty of time to have created one.
They're after the scraps thrown at them by the regulators, which will be significantly cheaper than if they'd have set up a network. Everything they spend now is a cheaper alternative to buying the slots on the open market. They may well seek to operate a subsidised short haul domestic feeder, and keep a couple of mid haul routes. But that would be it. Way less than 50% of the slots.
6
They do want the slots on the cheap though.
The plan for a substantial feeder network is again a misnomer. They've been at LHR for years. Plenty of time to have created one.
They're after the scraps thrown at them by the regulators, which will be significantly cheaper than if they'd have set up a network. Everything they spend now is a cheaper alternative to buying the slots on the open market. They may well seek to operate a subsidised short haul domestic feeder, and keep a couple of mid haul routes. But that would be it. Way less than 50% of the slots.
6
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They're after the scraps thrown at them by the regulators, which will be significantly cheaper than if they'd have set up a network. Everything they spend now is a cheaper alternative to buying the slots on the open market. They may well seek to operate a subsidised short haul domestic feeder, and keep a couple of mid haul routes. But that would be it. Way less than 50% of the slots.
6
6
If doing the deal fast is important to LH, you can be sure that their lawyers are already deep in discussions with the competition authorities and have already made a pre-emptive offer of slot handbacks with a view to getting a fast green light from the regulators. It's worth giving up a couple more slots if it gets a heavily loss-making company off your hands a few months sooner.
C.
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BD931 - BD932 LHR/IKA
Quick question WRT BD931/932:
What is the status with stopover these days? Does BMI still have refuelling stopover in Yerevan both ways, or does it go straight to IKA sometimes (depending on load)? Or are they picking up PAX For LHR/EVN and EVN/IKA route regularly now and make a stop over always?
Thanks. A.
What is the status with stopover these days? Does BMI still have refuelling stopover in Yerevan both ways, or does it go straight to IKA sometimes (depending on load)? Or are they picking up PAX For LHR/EVN and EVN/IKA route regularly now and make a stop over always?
Thanks. A.
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Discussed here :
http://www.pprune.org/airlines-airpo...ml#post6303532
and here :
http://www.pprune.org/airlines-airpo...ml#post6303580
In response to my question when I flew the route earlier this year. We stopped in Baku eastbound and Prague westbound.
http://www.pprune.org/airlines-airpo...ml#post6303532
and here :
http://www.pprune.org/airlines-airpo...ml#post6303580
In response to my question when I flew the route earlier this year. We stopped in Baku eastbound and Prague westbound.
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Thanks all for your replies. That renders them out of question for my travel plans then!
I wonder how are they going to be able to compete with THY, DLH, KLM, EK, EY etc then, none of them having to have forced techstops! I think they are solely competing on the basis of price now but is it going to be worth their while?
I wonder how are they going to be able to compete with THY, DLH, KLM, EK, EY etc then, none of them having to have forced techstops! I think they are solely competing on the basis of price now but is it going to be worth their while?
Paxing All Over The World
Sorry to be a doom sayer but: The chances of BD existing in their present form in 1 Year are slender - in the extreme.
The value is in the slots and routes and some of the staff and, depending on how it's financed, selling off the premises and equipment. BD on it's own cannot compete downwards with the LCCs nor upward to long haul. It will get squeezed out. IAG only want the slots (and mebbe some routes) because that's the way they have really grown in the last 25 years, buying up and spitting out smaller carriers. Since it worked for them in the past, they will presume it will work for them again.
Assuming that someone DOES buy it, we can but hope that not too many staff lose their jobs. Of course, the support and admin staff will lose the most.
The value is in the slots and routes and some of the staff and, depending on how it's financed, selling off the premises and equipment. BD on it's own cannot compete downwards with the LCCs nor upward to long haul. It will get squeezed out. IAG only want the slots (and mebbe some routes) because that's the way they have really grown in the last 25 years, buying up and spitting out smaller carriers. Since it worked for them in the past, they will presume it will work for them again.
Assuming that someone DOES buy it, we can but hope that not too many staff lose their jobs. Of course, the support and admin staff will lose the most.
