BMI REGIONAL-2
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now owned by BA .....
Travelmole
20 April 2012
IAG gets bmi at knock down price
International Airlines Group (IAG) has completed the purchase of bmi from Lufthansa, but has been saddled with bmibaby and bmi regional.
Under the deal, Lufthansa had been trying to offload bmibaby and bmi regional before the deal went through, but has failed to do so.
In a statement this morning, British Airways' parent IAG said under the terms of the purchase agreement, it will also acquire these businesses but with a "significant" price reduction.
Some analysts believe this could be as much as £80 million off the £172.5 million price.
The discount takes into account financial liabilities and losses that IAG is taking on.
IAG confirmed today that bmibaby and bmi regional are not part of its long term plans and will not be integrated into BA.
"IAG will pursue options to exit these businesses and more details will be provided in due course," said its statement.
"The costs associated with exiting these businesses, including the impact of operating them in the short term, are expected to be offset by the price reduction."
IAG said it will update investors about the bmi integration plan at its first quater results on May 11, 2012.
by Bev Fearis
IAG gets bmi at knock down price
International Airlines Group (IAG) has completed the purchase of bmi from Lufthansa, but has been saddled with bmibaby and bmi regional.
Under the deal, Lufthansa had been trying to offload bmibaby and bmi regional before the deal went through, but has failed to do so.
In a statement this morning, British Airways' parent IAG said under the terms of the purchase agreement, it will also acquire these businesses but with a "significant" price reduction.
Some analysts believe this could be as much as £80 million off the £172.5 million price.
The discount takes into account financial liabilities and losses that IAG is taking on.
IAG confirmed today that bmibaby and bmi regional are not part of its long term plans and will not be integrated into BA.
"IAG will pursue options to exit these businesses and more details will be provided in due course," said its statement.
"The costs associated with exiting these businesses, including the impact of operating them in the short term, are expected to be offset by the price reduction."
IAG said it will update investors about the bmi integration plan at its first quater results on May 11, 2012.
by Bev Fearis
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Having got "lumbered" with WW and BD-reg, and saving some of the dosh that would have gone to LH, does it offer an opportunity for IAG to set up a domestic/very close overseas operation similar to the proposed "Iberia Express"?
In the absence of any buyers so far, could this be a way forward?
VS could not afford to buy BD from LH, but could it buy BD-reg from IAG (it would obviously be cheaper)?
Could a VS-owned BD-reg provide a ready made short-haul operation for VS to use the LHR slots they want for domestic routes?
In the absence of any buyers so far, could this be a way forward?
VS could not afford to buy BD from LH, but could it buy BD-reg from IAG (it would obviously be cheaper)?
Could a VS-owned BD-reg provide a ready made short-haul operation for VS to use the LHR slots they want for domestic routes?
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I would agree TDK - what would be the point, they have made every effort to pull out of regional operations in recent years - they have their domestic flights into Heathrow (whenever i fly on one they are close to or are full) to serve London and their onward connections.
Iberia with Iberia express is operating in a different market (although i would have thought just buying out the rest of Vueling it doesnt own might have been easier if possible vs setting up another airline and dealing with the cost of industrial disputes) - its a bigger country land mass with more airports to cover over a wider area, there are islands to feed and serve, and they have more competition in their home turf domestic wise from their main bases - BA at present has no competition domestic from LHR and from LGW whilst there is some competition on domestic - it owns part of one of them - Flybe. As for the near europe - Easyjet covers that cheaper alternative (along with a slew of other airlines ) at LGW and BMI itself tried cheaper product offering at LHR and it didnt work.
Notwithstanding all of this - BMI Regional have the wrong aircraft for any major impact at LHR and WW have the wrong fleet mix for BA at LHR (LGW - maybe!)
If VS did get the slots I am sure they would want brand new aircraft and style it like Virgin America - why bother buying an airline with the wrong setup for the job - although in my honest opinion the limitations of where they can fly to and lack of possibility to easily expand - i can only see this as a big P&L cost to them.
Iberia with Iberia express is operating in a different market (although i would have thought just buying out the rest of Vueling it doesnt own might have been easier if possible vs setting up another airline and dealing with the cost of industrial disputes) - its a bigger country land mass with more airports to cover over a wider area, there are islands to feed and serve, and they have more competition in their home turf domestic wise from their main bases - BA at present has no competition domestic from LHR and from LGW whilst there is some competition on domestic - it owns part of one of them - Flybe. As for the near europe - Easyjet covers that cheaper alternative (along with a slew of other airlines ) at LGW and BMI itself tried cheaper product offering at LHR and it didnt work.
Notwithstanding all of this - BMI Regional have the wrong aircraft for any major impact at LHR and WW have the wrong fleet mix for BA at LHR (LGW - maybe!)
If VS did get the slots I am sure they would want brand new aircraft and style it like Virgin America - why bother buying an airline with the wrong setup for the job - although in my honest opinion the limitations of where they can fly to and lack of possibility to easily expand - i can only see this as a big P&L cost to them.
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The Herald Scotland
International Airlines Group, the parent company of British Airways, yesterday finalised its £172.5 million purchase of BMI from Lufthansa and confirmed plans to integrate the heavily loss-making airline into BA's operations.
But it said that BMI Regional and low-cost airline bmibaby "are not part of IAG's long-term plans". It added in a statement: "IAG will pursue options to exit these businesses and more details will be provided in due course."
Lufthansa had tried to dispose of both bmibaby and BMI Regional prior to the sale but failed to secure a buyer, prompting union concerns yesterday for the future of around 800 staff at both airlines.
However, a group of investors known as Granite is understood to be close to finalising a deal to buy BMI Regional, which flies from Glasgow, Aberdeen and Edinburgh to a number of UK and European airports.
The consortium nearly reached a deal late last year which fell through after one of the backers pulled out, a source said. "They're about 95% there. There have been hopes raised in the past but there is a new investor in place," the source added.
The consortium is being led by Ian Woodley and Graeme Ross, who founded Business Air before it was sold to British Midland in 1996 and changed its name to BMI Regional. Another key player is Robert Sturman, who was chief executive of British World Airlines for a decade.
Last week, IAG warned that the takeover of BMI was likely to lead to up to 1200 job losses.
But it said that BMI Regional and low-cost airline bmibaby "are not part of IAG's long-term plans". It added in a statement: "IAG will pursue options to exit these businesses and more details will be provided in due course."
Lufthansa had tried to dispose of both bmibaby and BMI Regional prior to the sale but failed to secure a buyer, prompting union concerns yesterday for the future of around 800 staff at both airlines.
However, a group of investors known as Granite is understood to be close to finalising a deal to buy BMI Regional, which flies from Glasgow, Aberdeen and Edinburgh to a number of UK and European airports.
The consortium nearly reached a deal late last year which fell through after one of the backers pulled out, a source said. "They're about 95% there. There have been hopes raised in the past but there is a new investor in place," the source added.
The consortium is being led by Ian Woodley and Graeme Ross, who founded Business Air before it was sold to British Midland in 1996 and changed its name to BMI Regional. Another key player is Robert Sturman, who was chief executive of British World Airlines for a decade.
Last week, IAG warned that the takeover of BMI was likely to lead to up to 1200 job losses.
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Don't think so, previous posts mention "Granite Aviation Limited". Company's House show number as 07690154 but that is just trolling, NOT confirmed.
Free company financial check on GRANITE AVIATION LIMITED. Free company accounts. Companies House information
Same link as yours, different company but the directors are the same as the press release.
Free company financial check on GRANITE AVIATION LIMITED. Free company accounts. Companies House information
Same link as yours, different company but the directors are the same as the press release.
Last edited by Kittiwake; 21st Apr 2012 at 08:34. Reason: More Trolling better information
Fit like min?
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Local press also had the story, again mentioned a new investor in place & hopeful that Messrs Woodley, Ross & Sturman with their backers can conclude by month's end.
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From what I read Granite were struggling to get financing together for whatever price Lufthy were trying to sell Regional for. If I were BA I would just sell it for a nominal price (or a price at least Granite can afford) as this would actual benefit BA - 1) they got a price reduction to take Regional in their BMI deal already 2) it would mean BA can offload quickly and focus it's attention on other matters 3) it means BA has fewer redundancy costs if it's only other plan is to sadly close it 4) it means BA doesn't get bad press this way (or less bad press at least) as jobs will be saved through a deal and the business hopefully could grow under leadership that wants to run a regional airline.
I hope a deal is made for regional and it's employees.
I hope a deal is made for regional and it's employees.
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IAG's Walsh 'Not Confident' On bmi Unit Sale
IAG's Walsh 'Not Confident' On bmi Unit Sale
'BA paid just £20 million for BMI', claims report - www.travelweekly.co.uk
British Airways and Iberia owner IAG will struggle to sell two loss-making subsidiaries it inherited through the acquisition of Lufthansa's UK unit bmi, IAG's chief executive Willie Walsh said on Monday.
IAG last year agreed a GBP£172.5 million (USD$277.6 million) deal to buy bmi but last week said it had received a discount for taking on bmi's loss-making low-cost and regional divisions.
Walsh said IAG was in talks with potential buyers but that a sale was far from certain.
"I'm not confident (about a sale), no. These are airlines that Lufthansa struggled to sell but we are going to make an effort to sell them," Walsh told reporters at London's Heathrow airport.
"We've made clear from the very beginning that regional and bmibaby don't form part of IAG's plans."
Bmi comprises three under-performing businesses: a traditional airline serving Europe, the Middle East and Africa; bmi regional, serving the UK; and low-cost unit bmibaby.
IAG said bmi's mainline operation would be integrated into British Airways, putting some 1,200 jobs at risk, while bmibaby and regional would be sold off or shut down.
Walsh said prized Heathrow take-off and landing slots that came with the acquisition of bmi would help IAG expand further into the Asian market, but warned that integrating the business into British Airways would take time.
"Bmi is a huge loss making company. If you look at the losses that bmi has had, a lot of work is going to need to be done to restructure that business," Walsh said.
(Reuters)
IAG last year agreed a GBP£172.5 million (USD$277.6 million) deal to buy bmi but last week said it had received a discount for taking on bmi's loss-making low-cost and regional divisions.
Walsh said IAG was in talks with potential buyers but that a sale was far from certain.
"I'm not confident (about a sale), no. These are airlines that Lufthansa struggled to sell but we are going to make an effort to sell them," Walsh told reporters at London's Heathrow airport.
"We've made clear from the very beginning that regional and bmibaby don't form part of IAG's plans."
Bmi comprises three under-performing businesses: a traditional airline serving Europe, the Middle East and Africa; bmi regional, serving the UK; and low-cost unit bmibaby.
IAG said bmi's mainline operation would be integrated into British Airways, putting some 1,200 jobs at risk, while bmibaby and regional would be sold off or shut down.
Walsh said prized Heathrow take-off and landing slots that came with the acquisition of bmi would help IAG expand further into the Asian market, but warned that integrating the business into British Airways would take time.
"Bmi is a huge loss making company. If you look at the losses that bmi has had, a lot of work is going to need to be done to restructure that business," Walsh said.
(Reuters)
'BA paid just £20 million for BMI', claims report - www.travelweekly.co.uk
He's busily 'managing expectations'.
Making it look hard to sell Regional, then miraculously doing a deal makes him look good to the public, the Scottish establishment, Regional employees, the City and IAG shareholders.
Standard practice.
Making it look hard to sell Regional, then miraculously doing a deal makes him look good to the public, the Scottish establishment, Regional employees, the City and IAG shareholders.
Standard practice.
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Quite possibly although I just don't believe that he got BMI for £20m; even after such sustained and heavy financial losses I'm not sure Lufty would fall for that.
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If I were BA I would just sell it for a nominal price (or a price at least Granite can afford) as this would actual benefit BA
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British Airways owner International Consolidated Airlines Group was one of the day's biggest fallers in a market that slumped dramatically after a new front opened in the eurozone crisis.
The airline lost 9.2p to 162.6p on concerns about some of the businesses it acquired with its acquisition of bmi from Lufthansa. It was originally set to pay £172.5m but received a discount as it also took on bmi's loss-making low-cost and regional businesses after Lufthansa failed to sell them separately.
Willie Walsh, the airline's chief executive, said it was in talks with potential buyers of the businesses, but he was not confident of a sale. Analysts at Deutsche Bank said they would have preferred it if the low cost carrier - bmi baby - and the regional business had been sold by Lufthansa as they would now take up BA management time. Deutsche's Geof Collyer said:
Nevertheless we believe the deal price reduction will cover financial costs of shut-down (redundancy payments, existing contract renegotiation and passenger compensation.)
IAG expects this to be completed by the year end and in our view it is crucial these businesses are wound down quickly so as to minimise drag to BA.
British Airways owner IAG drops on bmi concerns, while FTSE slumps on renewed eurozone fears | Business | guardian.co.uk
The airline lost 9.2p to 162.6p on concerns about some of the businesses it acquired with its acquisition of bmi from Lufthansa. It was originally set to pay £172.5m but received a discount as it also took on bmi's loss-making low-cost and regional businesses after Lufthansa failed to sell them separately.
Willie Walsh, the airline's chief executive, said it was in talks with potential buyers of the businesses, but he was not confident of a sale. Analysts at Deutsche Bank said they would have preferred it if the low cost carrier - bmi baby - and the regional business had been sold by Lufthansa as they would now take up BA management time. Deutsche's Geof Collyer said:
Nevertheless we believe the deal price reduction will cover financial costs of shut-down (redundancy payments, existing contract renegotiation and passenger compensation.)
IAG expects this to be completed by the year end and in our view it is crucial these businesses are wound down quickly so as to minimise drag to BA.
British Airways owner IAG drops on bmi concerns, while FTSE slumps on renewed eurozone fears | Business | guardian.co.uk
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I don't think it's quite as simple as that... Anyone could offer to take Regional off BA's hands for a nominal price, but the men from the ministry (CAA) will require the potential new owners to be suitable to hold an AOC and that they have sufficient funding in place to secure the operation. If Granite can't jump that second hurdle in particular (the former maybe being easier if post holders remain in place) I think any offer they make is unlikely to succeed.
Here's hoping Granite can put funding in place to convince CAA.
Profit (or loss) for a single part of a group of companies is a rather subjective matter. There are all kinds of things an accountant can do to make the figures look better or worse . An example of this might be where aircraft maintenance is performed centrally with the cost recharged to the various subsidiaries - charge too high and the maintenance subsidiary makes an unfair profit and the aircraft operationgs look loss making. Charge too low and the reverse is true.
An alternative way of fiddling the figures is having one company in a group doing all the external leasing, and charging artifically high or low lease rates (call it "management fees") to the other subsidiaries. Perhaps instead the head office cost code charges marketing fees for running the sales operation and handing over only part of the cash to the part of the business doing the flying ? Who's *really* making the profit or loss ? Can all get very murky and difficult to decipher....
Does anyone have some profit / loss figures showing how bmi regional would look if it were operated on a standalone basis ?
An alternative way of fiddling the figures is having one company in a group doing all the external leasing, and charging artifically high or low lease rates (call it "management fees") to the other subsidiaries. Perhaps instead the head office cost code charges marketing fees for running the sales operation and handing over only part of the cash to the part of the business doing the flying ? Who's *really* making the profit or loss ? Can all get very murky and difficult to decipher....
Does anyone have some profit / loss figures showing how bmi regional would look if it were operated on a standalone basis ?
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Thanks to BBC News.
BBC News - BA owner IAG doubts it can sell BMI Baby and Regional
So its now or never for Granite or anyone else.
BBC News - BA owner IAG doubts it can sell BMI Baby and Regional
So its now or never for Granite or anyone else.
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Whilst it is difficult to say if or by how much Regional contributed to the bottom line, Bmi did provide the majority of the behind the scenes functions, which no doubt helped Regional appear to make a profit of break even. It would be interesting to see the figures if they had to stand alone.
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BMI Regional were responsible for 0% of BMI's GBP£172.5 million losses
Profit (or loss) for a single part of a group of companies is a rather subjective matter.
Of course it could all be delaying tactics by LH/IAG (none of us here know what's going on behind the scenes), but it honestly doesn't look bright for WW/Regional
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BMI Regional
Listen, I don't purport to be an expert but with the greatest will in the World no one can turn a profit using 50 seat RJ's. Even the regionals in America are getting rid of these blackholes.
The bottom line therefore is that whoever takes this on will need to invest in a new fleet sharpish. Something the biggest airline in Europe was not prepared to do, not to mention that 'Granite' evidently don't even have the 2 pennies to rub together that BA would take for it.
Good luck to all the staff though, I hope something comes up
The bottom line therefore is that whoever takes this on will need to invest in a new fleet sharpish. Something the biggest airline in Europe was not prepared to do, not to mention that 'Granite' evidently don't even have the 2 pennies to rub together that BA would take for it.
Good luck to all the staff though, I hope something comes up