Airlines, Airports & Routes Topics about airports, routes and airline business.

BMI

Old 1st Nov 2011, 20:59
  #1 (permalink)  
Thread Starter
 
Join Date: Jan 2008
Location: LHR
Posts: 741
BMI

Well according to "sources" IAG is the front runner to buy bmi mainline.

IAG seen as frontrunner as bmi deal nears-sources

To those that balk at the thought of BA buying bmi, who else is going to buy it bearing in mind it's clear that LH want to sell and no-one else has the combination of big enough pockets and an existing operation in which to absorb bmi?
LD12986 is offline  
Old 1st Nov 2011, 21:34
  #2 (permalink)  
 
Join Date: Mar 2000
Location: U.K.
Age: 41
Posts: 3,112
There are numerous reasons for not selling bmi to IAG from Star and DLH's point of view. From surrending LHR (which they do care about) to the fact that the price for the company won't really be that attractive at all.

Selling bmi's fleet isn't really a goer since the aircraft in the vast majority are leased not owned. So asset stripping in this case isn't really worth it.

Since this is dragging on and on, then I am pretty certain that there is an almighty ding dong going on in the Lufty group board room. If bmi is sold off or shut down, then the egg on the face for the people involved in the original deal will be huge, in the past 12 month LH Italia failed and now if they get shot of bmi, they've failed there too. Ego and reputation are important when it comes to things like this.

I'm not saying that IAG won't buy bmi, just that I think there are other options that seem more likely when you think about it in more depth.
Say again s l o w l y is offline  
Old 1st Nov 2011, 21:56
  #3 (permalink)  
 
Join Date: Mar 2008
Location: LV
Posts: 1,755
What are these other options apart from IAG that seem more likely to you?
CabinCrewe is offline  
Old 1st Nov 2011, 23:55
  #4 (permalink)  
 
Join Date: Oct 2002
Location: sussex
Posts: 544
Buying or merging with mainline BMI dosn't stack up for BA.

All the pressure is on LH to sell, not for anyone to buy.
stormin norman is offline  
Old 2nd Nov 2011, 00:25
  #5 (permalink)  


Chieftan o'the Pudden Race
 
Join Date: Nov 1997
Location: Scotland usually, and often other parts of Europe
Age: 51
Posts: 826
BA would not be the purchaser. IAG would buy the slots, they wouldn't want the airline.
Flypuppy is offline  
Old 2nd Nov 2011, 00:44
  #6 (permalink)  
 
Join Date: Sep 2006
Location: Crawley
Posts: 254
I believe the monarch announcment will be before the end of the week.

But merging 2 loss making airlines together doesn't make sense.
Airbus321-200 is offline  
Old 2nd Nov 2011, 09:55
  #7 (permalink)  
 
Join Date: Dec 2000
Location: Samsonite Avenue
Posts: 1,495
He said at the end of the very long day that Monarch have a HUGE announcement to make in a few weeks time...
Ah.... so the cabin crew are getting a new uniform then?
Mister Geezer is offline  
Old 2nd Nov 2011, 09:56
  #8 (permalink)  
 
Join Date: Nov 2006
Location: united kingdom
Posts: 173
Flypuppy If BA for eg were to only buy the slots how would they fly them without the aircraft?
There is no way that BA have enough Aircraft to fly 50 extra flights per day.
If a company buys a slot pair they have to fly them the next day!!.They do not have the Luxury in waiting for 27 aircraft to come off the production line.
king surf is offline  
Old 2nd Nov 2011, 10:12
  #9 (permalink)  
 
Join Date: Oct 2007
Location: europe
Posts: 21
All this talk about IAG maybe buying bmi and not BA, and that this somehow makes a subtle difference as to whether they can avoid a TUPE purchase/just buy the slots etc is rather spurious if you ask me.

Of course it would be IAG rather than BA, as they are the mother company that hold the purse strings- just like when BA recently purchased the 6 slots from bmi the press release stated that "BA have obtained approval from IAG to purchase....", or to give another example when bmi have needed (lots) of money for anything in the last few years, it was DLH we turned to.

And no doubt you'll see some posters say "told you so, it was IAG" should this come to pass, but it is largely academic which of BA/IAG do the actual buying, as it would be BA, and not IAG that would then do the operating of the assets- let's hope with some well trained bmi crews.

This is a worrying time for bmi employees, and having pontification and schadenfreude doesn't help anyone except the know-it -all armchair generals.
pointless username is offline  
Old 2nd Nov 2011, 10:49
  #10 (permalink)  
 
Join Date: Jan 2006
Location: up north
Posts: 280
Why wouldn't BA (not IAG) want the slots plus aircraft and crews? The one factor that people are missing at the moment, and why the potential purchase of slots and aircraft to fly them by BA is timely right now, is the Olympics. There has already been discussion elsewhere on PPRuNe re any potential for BA to operate additional flights in 2012 (not possible). BA is still perceived in many markets as the flag carrier, and has a clear association with the 2012 events. It is therfore uniquely placed to capitalise on the potential additional high yield volumes if it has the slots and the aircraft and crews to fly them. The extra profit generated could go a long way to covering the purchase cost.
Hipennine is offline  
Old 2nd Nov 2011, 11:56
  #11 (permalink)  
Thread Starter
 
Join Date: Jan 2008
Location: LHR
Posts: 741
But for the trillionth time, and the link you've posted alludes to the same thing, if, and it is a massive if, bmi is sold to them it would be IAG buying it, NOT BA. There is a massive difference. BA is now a brand of the IAG group....why is that so hard to understand? I would also bet everything i own that there would be no merger, and there will be no bmi pilots/crew flying BA aircraft having being merged into the seniority list.

IAG is one of the few airline groups out there at the minute who's is doing reasonably well. Why on earth would they jeapordise that and take on something losing hundreds of millions of pounds a year, and commit themselves to flying a shedload of extra flights just to keep the slots, all at a time when that is probably the LAST thing anyone would want to do.

IAG want some (note some) of the slots, clearly. The rest of it, no, i dont think so.
I am well aware that IAG owns BA and M&A decision making now sits in IAG.

If IAG chooses to buy BD, whether it sits immediately under IAG or under the BA operating company is IAG's call and will be driven by a whole host of factors, such as tax structuring, financing and management reporting lines of the IAG structure. Ditto for whether it remains as a separate operating company or formally merges with the BA operating company.

Either way, it seems clear that LH want to dispose of BD by year end and it is the airline IAG is bidding for. The issue of BD's liabilities/losses are all things that will be factored into the deal price and terms.

There will be hard work ahead for IAG/BA if it buys BD but they're not going to pass at a once in a lifetime chance to grow significantly at LHR. And IAG has a CEO who is not one to shy away from hard work and difficult decisions.

IAG's Q3 results are out on Friday and they may give an update to the City on what they're doing then.

Last edited by LD12986; 2nd Nov 2011 at 12:27.
LD12986 is offline  
Old 2nd Nov 2011, 12:06
  #12 (permalink)  
 
Join Date: Feb 2011
Location: Leeds
Posts: 8
BA need the slots at LHR to continue to compete with the other large European carriers and Emirates, all of whom have much more room for expansion at their own hubs. I would be very surprised if BA did not acquire the majority of the slots. No doubt, some of those slots would have to be shared out to others for the purposes of competition regulations but I am sure BA would be happy enough with that.

If slots must be used straight away, then a total takeover of BMI seems logical as the aircraft and crew are there to continue flying whilst BA sets about a restructure of its routes and timings.

There is, of course the possibility of benefits being seen across the UK. Operations into the likes of MAN and EDI could be streamlined, potentially with larger aircraft releasing further slots at Heathrow that could possibly see the introduction/reintroduction of connections to other UK POD's. Thus, British Airways could start to truly think of itself as being British again.

With regards to Star Alliance, though they would lose a chunk of Heathrow, it would not mean that they no longer have a route in and out - plenty still serve it - it would more likely have an effect on transit with the emphasis more on Star strongholds such as Frankfurt, Brussels and Zurich.
whoshotjimmi is offline  
Old 2nd Nov 2011, 12:34
  #13 (permalink)  
 
Join Date: Oct 2002
Location: sussex
Posts: 544
LD, your correct in BA would not to miss out on expansion at LHR but more worrying is the risk to BA's cash position with a possible economic slowdown on its way.
stormin norman is offline  
Old 2nd Nov 2011, 14:09
  #14 (permalink)  
 
Join Date: Feb 2001
Location: gate 67 JFK
Posts: 690
Whilst i would not rule out further slot sales by bmi (to the highest bidder) in 2012 i think a take over of bmi by the IAG group remains very unlikely, the suggestion that DLH would sell all bmi LHR slots to fund a closure of bmi including its pension deficit is a non starter. Any deal involving the sale of bmi slot portfolio will require the buyer to buy bmi as a going concern, winding bmi up is not on the table.

In simple terms the PR damage done to the DLH brand by putting 3811 employees on the dole and seen to be pocketing 200 -500 million from the slot sale is far worse than the current financial pain DLH are enduring. With regional & baby away and a re focus on its route structure all ready underway it is likely that losses will start to fall in 2012.

DLH and its star alliance partners are not about to walk away from LHR.
INKJET is offline  
Old 2nd Nov 2011, 14:31
  #15 (permalink)  
Thread Starter
 
Join Date: Jan 2008
Location: LHR
Posts: 741
DLH and its star alliance partners are not about to walk away from LHR.
What Star Partners think is irrelevant. They're not the ones with bmi bleeding red ink over its balance sheet.

DLH have said their thinking towards LHR had changed. Even if they ploughed in millions to turn around bmi it will still be No 2 behind BA by a considerable margin and bmi is unlikely to cover its cost of capital. DLH are interested in hubs where they are Number 1 (FRA, MUC, ZRH etc).
LD12986 is offline  
Old 2nd Nov 2011, 14:46
  #16 (permalink)  
 
Join Date: Oct 2004
Location: England
Posts: 50
If Star Partners were interested they could help to offset the losses!

Not to sell bmi after all the noises about it from Frankfurt would be absurd. Gemkow has won the boardroom fight, they want rid of bmi, IAG are the favourites. If they can sort out the price, then the deal will be done. Frankly neither side can afford not to do this deal.

Having bought it, running it as bmi would be mad. They'll want to use its presence to drive down BA short haul costs. That will lead to a fight with the BA and bmi unions, so they'll have to incorporate it into BA and do a "deal" with the employees, a lot of whom will get made redundant.

Last edited by look you; 2nd Nov 2011 at 15:03.
look you is offline  
Old 2nd Nov 2011, 18:07
  #17 (permalink)  
 
Join Date: Jul 2006
Location: London
Posts: 422
Looks like the whole bmibaby/Monarch rumour is true then!
TCX69 is offline  
Old 2nd Nov 2011, 18:22
  #18 (permalink)  
 
Join Date: Sep 2008
Location: Blighty
Posts: 3,651
It ain't true until the fat lady sings / the contract is signed / Lufthansa publicly announces it (delete as appropriate)
davidjohnson6 is online now  
Old 2nd Nov 2011, 21:35
  #19 (permalink)  


Chieftan o'the Pudden Race
 
Join Date: Nov 1997
Location: Scotland usually, and often other parts of Europe
Age: 51
Posts: 826
King Surf, IAG is more than just BA. Iberia airframes could be used to fill some of the gaps and there are plenty of airframes that can be ACMI-ed in.

Inkjet, didn't you say that it was "utter tosh" that bmi Regional would be sold?
Flypuppy is offline  
Old 2nd Nov 2011, 21:49
  #20 (permalink)  
 
Join Date: Jun 1999
Location: Give Current Ops a shout.
Posts: 950
Seems like a number of people could be eating their own words from this thread once Lufthansa announces what is going to be done with main line .
CAT3C AUTOLAND is offline  

Thread Tools
Search this Thread

Contact Us Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.