BE

My comment was not meant to be heartless at all, my heart goes out to those who will be negatively affected. I think there are some very positive results from this acquisition, in that there will be a more security for more staff than would have been the case if a buyer had not been found and LH had had to make the saving required themselves, or some of the other potential buyers who were rumoured to have expressed an interest had done so.
Defininitely no offense meant, I have been in that unfortunate position myself and it's no fun.

Bad news for the travelling public. A fantastic airline disappears, its staff end up jobless, BA has less competition and becomes more arrogant and highhanded in its dealings with its 'customers', its rivals, and the travel industry. Fares go up, choice goes down, and a part of aviation history disappears. And BA control 56% of LHR slots - surely that can't be healthy.

Skipness, this sums the whole thing up, you are right.

EI-BUD

Or IAG expand the lower cost base BMI and BA withers on the vine?

Fincastle, how exactly is this not good news for the BMI staff? Perhaps you think it would be better for IAG not to have bought BMI in which case the likely scenario would have been BMI shuts down completely and all staff are redundant.

Capetonion, BA's control of LHR slots is still not as good as many other airlines have at their hubs. Without these slots BA couldn't expand - and from what I can tell, BA expansion is a very good thing for the British public!

But that is okay for Air France, KLM and Lufty at their main bases?

Market dominance is rarely a good thing for the consumer.

That would be a good outcome, I think it unlikely.

BMI are being bought by IAG, not by BA, that's true, but who's the David and who's the Goliath here? My prediction is that BMI will be swallowed up by BA. Watch this space - I hope I'm wrong.

Personally, I rather hope that you're right ...

Having spent that much cash on getting LHR slots to serve the Far East, why would IAG then wind up BD with it's substantially lower cost base than BA?

Seems to me they could use the BD crew on routes where margin is very tight and make them slightly more profitable.

Strikes me it's much like the QF/JQ issue in AU - QF have a very high cost base and appear to be trying to switch routes to the lower cost base JQ.

I'd be more worried if I was at BA right now...

Can I reassure any BMI crew reading this that BA crew will welcome you into our operation if integration occurs. Our internal debates are focussing on a possible future where IAG keep you as a seperate "stand alone" with consequent pressure on BA terms. This is seen as a worst case and a lot of debate is happening now to ensure BMI crews become fully part of BA.

I hope you all can enjoy Christmas knowing that there could be a "Happy New Year" in the offing...............

EI-BUD

Why do you always have a down on bmi
You didnt listen to WW on the radio this morning he is keeping the BHD/LHR Route

The way I see it, the bmi domestics and near Europe short-haul from LHR will mainly stop (especially where there is direct competition with BA today) - the slots freed up will be used for the much talked-about long haul expansion.

Having said that, it'll be interesting to see what happens with LHR to DUB and BHD (which BA don't operate and haven't in their own right for a good few years)

Some of bmi's niche Middle-East/near Asia routes (basically the old BMed business) could be kept, and would enable BA to (once again) place their brand in these markets where it makes financial sense. Of course, they also compete today is some of these areas (Saudi, as an example).

As often happens in M&A situations, it's the HQ-type functions and roles at bmi that must be at greatest risk. For example, BA might be able to "synergise" some/all of bmi's Airbus crews into it's own operations, which could be at the expense of their ab initio Programme.

One assumes that Woodley et al are having a ball trying to get banks interested in them, after all, they have been there before and couldn't make it work then. Can't be a lot different now except that the banks are a lot tighter!

What domination ? Every time I go to Heathrow I see a huge range of carriers operating besides BA/BMI. It's nothing like going to Dallas, or Seoul, or similar, and seeing 90% by one carrier. You can see the same in the UK, at Southampton (FlyBe), even Stansted is heading that way with Ryanair. Nobody has complained about domination there.

When BA withdrew from the regions it wasn't through some fit of pique, it was because a huge range of competitive options from European and Intercontinental airlines had made services from there no longer worthwhile. Some domination !

BA and BMI used to be the key two operators on London to Scotland; now it's BA and Easyjet, which latter have taken the bulk of the leisure market. It really doesn't sustain a limitless number of operators.

Full integration seams to be the most popular option but there is a hell of a lot of work to go through to make the deal right for everyone involved.

As for routes who knows but I'm fairly sure the middle eastern routes will be kept and prob if possible put on a bigger aircraft one that can be nicely filled up with cargo because from what I here those airbus are operating out of there at max RTOW with cargo that's where the money is on the routes not so much the pax.

Let the fun begin.

If IAG have the option to buy BMI regional if noone else does. What would they do with it?

Does not fit within their current model at all.

BMI are not fantastic and have not been so since the rebrand where "BMI" was not an acronym and "didn't stand for anything". A truer word was seldom spoken....
BA and BMI do not compete on more than a small handful of routes, they are complementary not competitive.
Most BMI crew will be needed to fly the program to keep the slots.
Fares were kept high in LHR-GLA when the demand vanished but right sized when BA added in the B767 to up capacity. easyJet are a tough competitor in that market and make sure there is no monopoly, indeed far from it.
Any monopoly gained today will ONLY be in routes ending in "-stan"!
As has been pointed out, controlling 56% of slots at your home base is less than say :

LH at FRA
AF at CDG
KL at AMS
AA at DFW
UA at EWR / IAH
EK at DXB
QR at DOH
EY at AUH
FR at STN

Aside from all of that your analysis nailed it.

If BMI's cost base is so much better than BA's, why is it that BMI are and have been losing huge amounts of cash. Lufthansa are selling BMI because they are a money making outfit, rather the opposite. The headline price for the sale of £172.5 million allows IAG to gain a lot of slots for not a lot of money, but they are also taking on a loss making outfit and a large pension debt. The concept that BMI could, with their lower cost base, do anything for IAG without massive restructuring is deeply flawed.

IAG are not interested in either Regional or Baby. QUOTE from their press release:

"bmi regional and bmibaby are not part of our plans and Lufthansa has the option to sell them before completion".

All very interesting and even better that we've got to the bottom of page 1 without degeneration in vitriol. :ok:

This debate will no doubt run and run, but let's remember that IAG already know what they plan to do with their acquisition.

SGC