BMI
 

Was just reading the bmi newsletter/email about what the airline plans for the strike at BA if it goes ahead. The airline said it will add capacity and additional flights on similar routes that BA operates.

It said that it would use the slots that become available during the strike to add services. I wonder where they will get the additional capacity?
Probably Titan etc.

However the tone of the information (available on bmi site) sounded to me like cooperation with BA rather than opportunistic!!

What does anyone else think ?

EI BUD


Continuation of: http://www.pprune.org/forums/showthr...234532&page=13

EI-BUD

This is just bmi doing what it should have done with previous LHR/BA troubles. During the increased security and fog problems last year, bmi did not suffer as much as BA with cancelled flights. Especially the fog at the end of the year, flights were going out less than full and not once did bmi toot their own horn and let the punters know, there was no press coverage of the fact which gave the public the opinion that because BA had problems, LHR was effectively shut down and unoperational, this was a missed oppurtunity for bmi.

bmi in talks to buy British Mediterranean
 

Just read this in the Times. Does anybody know any more?

http://business.timesonline.co.uk/ar...7-2563445.html

BMED ‘in talks with bmi’
24 Jan 2007
The Daily Telegraph reports talks between BMED and a group of UK investors about a potential £30m rescue bid for the airline have broken down.
BMED announced earlier this month that the investors, who include a subsidiary of M1 Group, which is controlled by the Lebanese Mikati family, would provide £30m funding in return for majority control of the airline. They would also, as a ‘demonstration of good faith’, advance £3m of the £30m to BMED by way of a term loan to help meet the airline’s immediate liquidity requirements.

However, according to the Telegraph, the proposed deal has broken down and BMED is now in ‘last-ditch rescue talks with another airline’, believed to be bmi. BMED is reported to have written to its shareholders, who include its chairman, Tory peer Lord Hesketh with a 19% stake, warning that if the latest talks fail there is a risk it will be unable to pay its debts.

The paper quotes BMED chief executive, David Richardson: ‘While we are still having conversations with the Mikatis, their exclusivity period has come to an end. They wanted to make some pretty significant changes to the deal which our shareholders thought was unjustified.’

Richardson declined to comment on any other potential buyers, but added: ‘I am still confident that we will be able to secure a deal with someone. If you are an airline with eight slots at Heathrow, it’s bizarre that you wouldn’t survive in some shape or form because those slots have value.’

BMED, formerly British Mediterranean Airways, was established in 1994 and became a British Airways franchise partner in 1997. It currently operates a fleet of eight aircraft in BA colours to 16 destinations from Heathrow including Beirut, Damascus, Teheran, Tashkent and Khartoum, and employs 750 staff.

In the year to end-Mar05 BMED made a pre-tax profit of £5.1m on revenues of £99.7m. However, record oil prices coupled with the Jul06 Israel-Hezbollah hostilities in Lebanon are expected to push it to a £21m loss in the current financial year, on top of FY05/06’s £10m loss.

In FY04/05 BMED paid BA about £14m in franchise fees and for services including engineering and airport lounges, the Telegraph said. It also provided BA with £28m-worth of connecting passengers, while BA fed through £35m-worth to BMED.

Richardson told the paper: ‘BA are happy with the franchise agreement as it is but we are struggling to make it work for us.’

The Telegraph also has this:

http://www.telegraph.co.uk/money/mai...4/cnbmed24.xml

Guess if BMI bought BMED then that would be the end of the franchise??

Not necessarily.

It could have some interesting synergies, I would have thought.

What was once a proud airline is now BlackHole airlines ..... along with BA . They call it progress . A pox on modern "managers" , long short and tall .

BMed update
 

Any update from people in the know and implications for the crew of BMed being taken over by another airline?

Heard today that JER - LHR is confirmed. Also heard that the Bmed rumour is true. bmi are in talks but nothing more than that. If the talks are a success bmi are in a position to move forward on a deal. This came directly from the Hall. We'll just have to wait and see.

Jersey Route
 

Yes the Heathrow-Jersey route all being well will be signed up tomorrow.

Two flights a day starting the day after the Paris flight finish.

Times are LHR 0710 JER 0815 JER 0840 LHR 0945
LHR 1840 JER 1940 JER 2035 LHR 2135

We will have to wait and see how well it performs it will be reviewed after three years the articl stated.:ok:

25 Min turnaround in JER in the morning rotation!
Seems a bit short for bmi? I take it these are just provisional timings.
Brgds
Richard

BMED position
 

How can bmi in its wildest dreams want to buy BMED: BMED was profitable until two years ago but with geo political problems in the middle east + aircraft that are not suitable for the region how can any airline survive with the losses that it has suffered to date? Do bmi want the LHR slots or give BA a bloody nose?

Good luck to all.

Matterhorn

Bmi & Bmed
 

Matterhorn

Have to say Matterhorn , I have been thinking the very same as you. Bmi would be crazy to seriously consider the network of BMED, many destinations are in politically volatile areas. And lets be realistic BA are delighted to have services to these areas and have absolutely no risks. BA themselves never did have much in its own right to these destinations pre BMED??

If Bmi are buying BMED for slots thats another matter. In any case. BMI have racked up cumulative losses since 2001 of STG18M .. I would be surprised to see them make investment into an airline that itself is in bad financial repair. ADVERT LINK REMOVED

Surley BA have an agreement with BMEd that BA would get first refusal to buy the business??? I think Bmi is getting friendlier with BA??

The whole info about BA strike on bmi website does not seem to be anti BA . Ie I detected from the information more of a cooperation than opposition??

What does anyone think ???

Actually, bmi have been gaining experience on flying to politically volatile areas with the very successful Riyadh & Jeddah routes. They could make the former BMED services work by not having to pay BA for the franchise agreements, but also with a lower cost base.

Air France have been doing this with their Dedicate service whereby the timetables, frequencies, service levels and comfort on Dedicate flights match all the usual Air France long-haul standards. The flights are operated using 82-seat Airbus A319s offering l'Espace Affaires (business) and Tempo (economy) cabins, which seems to be what bmi/BMED have with their A320s, and can carve out a more successful, profitable niche than flying up/down to Scotland, competing with BA, easyJet and the trains.

Got it in one I would think, with the added bonus of a compatible fleet (inc engines??) and trained crews (I guess).

Bmi have tried to be creative with their lack of slots in the past - ie their attempt to start up to Doha in cooperation with Qatar AW - so the 7-8 arrival each day that BMed would provide would give them scope for a number of profitable options.

What happened here at LBA?


http://www.airliners.net/open.file?id=1166724

Because Prune want people to use an existing thread for a company and not start lots of new threads.

Simple

I can't concieve of why bmi would want more LHR slots right now, unless it was to sell them on later (BMed perhaps being cheaper than the value of their slots?) - if anything, bmi have been operating "slot holding" flights into LHR recently in oder to preserve those slots that they have, rather than needing more. Jersey isn't using all of the slots made vacant by the withdrawal from CDG, so again bmi have some slots looking for flights. The QR deal was nothing to do with bmi needing slots - it was in fact QR operating on a bmi flight number using bmi slots, because the bilatteral didn't allow QR to increase frequencies and QR couldn't get slots itself but bmi had some slots "available".

Actually, as mentioned above, BMed's sphere of operations does IMHO fit fairly nicely into bmi's "new" direction - mid-haul into primarily non-leisure destinations - and on that basis I'd have thought BMed would be quite a nice fit. However, do bmi actually have the money to spend on BMed, because I doubt Uncle Lufthansa or Auntie SAS will put their hands in their pockets without very good cause?
Andy

Re LBA
 

That's what happens when you land with the parking brake set :{

In relation to the BMED talks, the CEO, dep CEO, Finance Director and GM Networks were all down in London last week. The FD is going to be there for maybe another two weeks and the CEO & d CEO are not to be relied upon to be at the Hall over the next couple of weeks.

East Mids

BMI might not have the money and LH or SAS might not want to fund this purchase but BMI's Board of Directors might have the money to buy it separately and then potentially later merge the two, Sir Michael has ran airlines separately from BMI before if my memory is correct and am not sure what the competition rules might be on the No2 LHR carrier being a franchise operator for the No1 (BA) so he may have to keep the two separate for now - thats if the franchise were to remain.

The deal is done.

BMI have just bought BMED.

:{

Is this true?

Hope so, could be great for both airlines.

Tragic :{

'Two wrong's don't make a right', springs to mind.

Good luck to all the BMed staff.

Is this definite?

Any source?

I was aware talks were taking place, any word on what they are going to do with us?

Regards

Mike

BMI Have bought BMED, there is no news though on what the terms of the deal are, so who knows if the BA franchise will stay!!

Apprently for the franchise to end there has to be something like a years notice from either side, but thats nothing that some Lawyers couldn't sort out!!

The deal was done last week. Today is soley for the media.

Interesting on the aircraft front.

BMED has several A321s on order, a type which bmi are in the process of removing from their fleet. The 3 x A320s are the only fit.

Contrary to previous posts the deal is in fact not yet done! We should know by the end of tomorrow if it is.

Assuming the two companies are run separately, this is not an issue, it might even be beneficial to bmi for two reasons:
1) bmi could phase out their A321s quicker by handing them to BMED
2) bmi could use BMEDs A321s occasionally when passenger demand warrants it, or even their A320s.

Do BMED own their own slots at LHR and down route or are these BA's? Would they also continue to operate under the franchise after the take over?

BMED own the slots at LHR in there own right. I also think that thay own the route licences to the destinations they fly to.

Don't know what will happen to the franchise - one world versus star alliance?

BMED have/had 8 slots at LHR.

Re the 321s, bet Monarch would have them. Did they have some off BMI?

Of the remaining five A321s, three are for Monarch, one of which is stored at EMA in their livery, the other two have yet to find a buyer(s).

MIDJ/K/M are the ones for Monarch.

If this deal does go ahead, I can see GB taking the 321's from BMED along with their franchise routes and as many of their Captains as possible. GB have been recruiting a lot of F/o's of late which fits in with a large rapid expansion. And if some of BMED's management pilots come to GB as well then that would also fit with the departure of GB's ops manager? All speculation but the picture is slowly becoming clearer.

Cracking deal for bmi if they don't end up paying too much for it.

Although bmi has been taking A321s out, I can't see why they would want to get rid of the BMed ones if a) they are in medium-haul fit and b) they have a whole new raft of (ex-BMed) routes on which to fly them. The rationale (as I understand it) for bmi to get rid of its A321s was that they didn't work on LHR-AMS, EDI, GLA etc. It is something of an illogical jump to say that because the economics don't make sense on LHR-AMS/EDI/GLA, they therefore don't work on LHR-BEY/AMM/ALY etc.

I thought the BMed A321s had aux fuel tanks fitted which are a bit of a nightmare if you want to operate them in high-density config a la Monarch - didn't think you'd get all of the bags in. Happy to stand corrected on that.

BA franchise agreements have an early termination clause in the event of a hostile change of ownership of the franchisee, and it's hard to see why BD would keep it in place for anything other than a transitional period. Surely they / their Star Alliance partners would want to move the feeder traffic off BA onto their own services - I would suspect that would be one of the compelling reasons to acquire BMed in the first place.

There must also be some scope to plan the whole operation more efficiently using bmi's extensive LHR slot base and by combining the fleets. If I remember rightly, the bmi A320 which does LHR-DME-LHR doesn't do anything else in the day, and is back home by early evening. This could quite easily pick up a BMed evening departure out to the east, and another aircraft arriving in from a BMed route in the morning (using a bmi slot) could pick up the outward DME. Hey presto - one less aircraft needed. I suspect that bmi could probably find that they could save two or three A320/321s through more efficient scheduling of the combined bmi/BMed route networks and slots. Again, compelling logic for the deal; you earn the same revenue but need two less aircraft to do it.

The plus point is that fewer aircraft probably would still need broadly the same number of pilots and cabin crew due to the routes involved.

Why would GB get BMED's A321's?? Surely if BMI buy BMED then they are going to get the A321's and not get rid of them straight away.

Also BMED own the slots and the routes so again why would BMI buy another airline and then get rid of the slots to someone else?!?!

Just speculation Sonic cruiser, but GB want to replace their 320's with 321's and if BMI/BMED want 320's instead of 321's?
As for the routes I'm sure BA will want a presence on some of the routes lost if BMED take the route license with them, so GB would be the ideal candidate.
Will have to wait and see.