bmiBaby threads (merged)
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I wouldn't get to excited over the word consultation, unions and staff repersentertives must be consulted on a change of ownership at least 14 days prior to such change.
The Sunday Times are reporting that Lufthansa are threatening to close bmi if the EU inquiry drags on, it says the EU have rejected the remedies offered by IAG/bmi as inadequate.
The Sunday Times are reporting that Lufthansa are threatening to close bmi if the EU inquiry drags on, it says the EU have rejected the remedies offered by IAG/bmi as inadequate.
Last edited by INKJET; 18th Mar 2012 at 08:47. Reason: Updated
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There was always a danger of this, but I thought both IAG and DLH were savvy enough to avoid it.
The irony is that if the competition commissioners hold the deal up, Lufty pulling the plug will result in, well, less competition with a side salad of 3000 unemployed people.....
The irony is that if the competition commissioners hold the deal up, Lufty pulling the plug will result in, well, less competition with a side salad of 3000 unemployed people.....
LUFTHANSA is considering shutting down its BMI British Midland subsidiary if the sale of the loss-making carrier is held up by Brussels.
The German airline agreed in December to sell BMI to International Airlines Group (IAG) for a maximum £172.5m, but the deal could be held up by a European competition investigation as last week Brussels rejected concessions offered by IAG, saying they were inadequate.
Lufthansa is desperate to offload BMI because it is a huge drain on its finances. The latest accounts reveal a £151m pre-tax loss for the British carrier last year. Lufthansa has set aside £108m to cover the deal, including the cost of taking on the pension scheme plus a dowry for IAG, owner of British Airways.
IAG wants BMI for its landing slots at Heathrow. A merger would boost its share of slots at the key hub from 44.8% to 53.5%.
Sources said that Lufthansa could pull the plug on the British carrier if Brussels decides on a protracted investigation. It is thought the Germans want to avoid the further losses that would accrue during an inquiry that could run for months.
A source said: “Both sides want to finish this deal. Of course, if you cannot see an end to it, that might be an option — to close it down.” Lufthansa declined to comment.
The German airline agreed in December to sell BMI to International Airlines Group (IAG) for a maximum £172.5m, but the deal could be held up by a European competition investigation as last week Brussels rejected concessions offered by IAG, saying they were inadequate.
Lufthansa is desperate to offload BMI because it is a huge drain on its finances. The latest accounts reveal a £151m pre-tax loss for the British carrier last year. Lufthansa has set aside £108m to cover the deal, including the cost of taking on the pension scheme plus a dowry for IAG, owner of British Airways.
IAG wants BMI for its landing slots at Heathrow. A merger would boost its share of slots at the key hub from 44.8% to 53.5%.
Sources said that Lufthansa could pull the plug on the British carrier if Brussels decides on a protracted investigation. It is thought the Germans want to avoid the further losses that would accrue during an inquiry that could run for months.
A source said: “Both sides want to finish this deal. Of course, if you cannot see an end to it, that might be an option — to close it down.” Lufthansa declined to comment.
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I doubt that ACL would approve the slot transfers, knowing that Bmi was going to close down.
From IATA rules on slot transfers;
7.15.1 An airline that ceases operations at an airport must immediately return all of the slots allocated to it for the remainder of the season and for the next season (if already allocated), and advise the coordinator whether or not it will use the slots in the future.
Dave
I doubt that ACL would approve the slot transfers, knowing that Bmi was going to close down.
From IATA rules on slot transfers;
7.15.1 An airline that ceases operations at an airport must immediately return all of the slots allocated to it for the remainder of the season and for the next season (if already allocated), and advise the coordinator whether or not it will use the slots in the future.
Dave
Last edited by Airclues; 18th Mar 2012 at 17:53.
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A couple of points on the TUPE and slot issues raised by a number of posters.
TUPE only applies where there is a transfer or sale of a business as opposed to a sale of a company (which is why no consultation is required for the sale of bmi to IAG as its the parent company of bmi that is being sold).If consultation is being proposed it suggests that bmibaby might be sold as a business and not by selling the company bmibaby limited. Not totally sure why that would be, but could be because the aircraft were actually leased to british midland airways limited and so a sale of the company bmibaby ltd doesn't accomplish what the buyer actually needs. The only other reason for consultation would be if large scale redundancies were being planned, but that seems unlikely as either a sale will happen or the whole business will be closed by IAG or LH in the doomsday scenario below.
On the slots and potential close down scenarios, it is highly unlikely that LH could transfer the slots to themselves and then proceed to wind up bmi. The slot regs require that they are operated at least 80% of the time , so LH would have to find the means to fly these 50 odd slots in order to retain them, which means aircraft, crews and routes. Even if they could find the means, what makes you think they would lose any less than bmi operating the same slots? Selling them on to other airlines is not realistic except at the margins....50 is an awful lot of slots to sell quickly particularly when the buyer has to find a slot pair to exchange for the pair it is buying, and there are very few airlines out there looking to increase capacity in a hurry.
If close down is really an option being contemplated by LH then they would probably simply pull the plug by putting in a liquidator and walk away from the whole thing including the pension scheme. Financially that would be a lot better for them than the deal on the table, but reputationally it would be disastrous. Can't see them doing it. It's an attempt to get the EC to roll over quietly.
TUPE only applies where there is a transfer or sale of a business as opposed to a sale of a company (which is why no consultation is required for the sale of bmi to IAG as its the parent company of bmi that is being sold).If consultation is being proposed it suggests that bmibaby might be sold as a business and not by selling the company bmibaby limited. Not totally sure why that would be, but could be because the aircraft were actually leased to british midland airways limited and so a sale of the company bmibaby ltd doesn't accomplish what the buyer actually needs. The only other reason for consultation would be if large scale redundancies were being planned, but that seems unlikely as either a sale will happen or the whole business will be closed by IAG or LH in the doomsday scenario below.
On the slots and potential close down scenarios, it is highly unlikely that LH could transfer the slots to themselves and then proceed to wind up bmi. The slot regs require that they are operated at least 80% of the time , so LH would have to find the means to fly these 50 odd slots in order to retain them, which means aircraft, crews and routes. Even if they could find the means, what makes you think they would lose any less than bmi operating the same slots? Selling them on to other airlines is not realistic except at the margins....50 is an awful lot of slots to sell quickly particularly when the buyer has to find a slot pair to exchange for the pair it is buying, and there are very few airlines out there looking to increase capacity in a hurry.
If close down is really an option being contemplated by LH then they would probably simply pull the plug by putting in a liquidator and walk away from the whole thing including the pension scheme. Financially that would be a lot better for them than the deal on the table, but reputationally it would be disastrous. Can't see them doing it. It's an attempt to get the EC to roll over quietly.
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If close down is really an option being contemplated by LH then they would probably simply pull the plug by putting in a liquidator and walk away from the whole thing including the pension scheme. Financially that would be a lot better for them than the deal on the table, but reputationally it would be disastrous. Can't see them doing it. It's an attempt to get the EC to roll over quietly.
A few well chosen threats would likely be listened to carefully by unions at Austrian as well.
Europe is in recession amd has no immediate prospect of economic good times returning quickly. Sometimes companies have to turn nasty as part of a capitalist environment. The German unions are unlikely to make a significamt protest as bmi snd AUA are only damaging increased salaries for staff in Frankfurt and Munich
Europe is in recession amd has no immediate prospect of economic good times returning quickly. Sometimes companies have to turn nasty as part of a capitalist environment. The German unions are unlikely to make a significamt protest as bmi snd AUA are only damaging increased salaries for staff in Frankfurt and Munich
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I don't think this is all brinkmanship on Lufthansa part, rather a statement intended to focus the minds of the EU
Equally a walk away leaving unpaid creditors would do immense damage to Lufthansa international reputation, the money might be hurting but that can be earnt back.
bmi is over what ever happens now, the press coverage this weekend will further undermine ticket sales, the trickle of staff leaving will increase week by week, this needs sort by month end and i suspect that the UK Government will be making calls to the EU early this week to tell them to stop faffing.
A sad end to a once proud airline RIP bmi
Equally a walk away leaving unpaid creditors would do immense damage to Lufthansa international reputation, the money might be hurting but that can be earnt back.
bmi is over what ever happens now, the press coverage this weekend will further undermine ticket sales, the trickle of staff leaving will increase week by week, this needs sort by month end and i suspect that the UK Government will be making calls to the EU early this week to tell them to stop faffing.
A sad end to a once proud airline RIP bmi
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I'm not sure this government have the fight for anything aviation at the moment.
If BMI is a massive drain on LH cash, then without drastic surgery it will soon be bleeding BA dry as well.
If BMI is a massive drain on LH cash, then without drastic surgery it will soon be bleeding BA dry as well.
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good news would be very welcome at bmi. As long as its not a communication saying that the catering company has agreed to increase the meat content of the hot wraps by 5%!!!!!
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I've heard that too from people who should know.
As with anything, it might take a bit longer than everyone would like, but from the sound of it, there might be some good news soon. Which I would certainly welcome.
They just need to get Regional sorted now...
As with anything, it might take a bit longer than everyone would like, but from the sound of it, there might be some good news soon. Which I would certainly welcome.
They just need to get Regional sorted now...
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If I had a penny for every time I heard someone say that, I'd be able to buy Baby!
Wish everyone at baby the best of luck with it all - it would be a crime to lose the product.
Nimrod
