bmi longhaul

[Airbusbellboy]

Looks like bmi are getting their A330 back from SAA Anyone know what the grand plan is? Heard talk of Manchester direct to Miami! Also is it true that bmi had a firm order for an A340 which could be used to go to HKG from LHR.

Anyone got the lowdown to seperate fact from fiction???

[GW76]

http://www.airbus.com/doc/media/ordersndeliveries/orders_n_deliveries.xls
Official Airbus Orders and Options - No evidence of an A340 order or option.:sad:

[Busta Level]

A330 to be 'stored' at MAN over the winter (at least), minus one engine (lease engine going back to RR).

Definately no other longhaul aircraft on order.

[BEagle]

It's hardly a secret that British Midland have been heavily involved with AirTanker, one of the consortia bidding for the RAF's Future Strategic Tanker Aircraft programme. AirTanker are proposing the A330-200 platform and their bid 'may' include used aircraft.

The announcement of the preferred bidder, whether AirTanker using new or nearly new A330s - or their competitor TTSC using the old B767-336s from ba - is expected by year end.

So, British Midland 'storing' aircraft at just the time that the preferred bidder is expected to be announced....?? Hmmm......

[flymeagain]

Why is it the BMI board are so frightend to start another route? The success of the current IAD and ORD routes would sureley make them think that they had a good thing going for them, and it seems to be the only thing in Mainline that's making a profit at the mo!!! It looks like Bishop is not bothered any more and Reid just wants to get his retirement payout next year. At a time when other airlines are taking the plunge and having a go (and usually making profits) there are so many other options that bmi could do and make money, middle east, far east, south Africa, evan more american routes from Man. Youve got to speculate to accumulate, so take the pluge Bish, youve got a great product, I tried it myself and its definatly one of, if not the best in the sky.

[Copenhagen]

Success at ORD and IAD - You must be Joking. :O :O :O

BMI are losing their shirts on these routes at present - hence aircraft subleased at rockbottom prices, engines being sent back and brand new aircraft left to rot at Manchester.

[flymeagain]

Sorry to have to correct you Copenhagen, but they are making money on the routes and enjoying a high load factor, evan though the yield may not be as much as they would like. there are also high cargo loads and have been for a long time which sometimes pay for half the flight!!! trust me I know!!!

[ajamieson]

trust me I know!!!

Without wanting to labour the point, the routes are losing money heavily. Loads are acceptable, but the start-up, training and product development costs are stratospheric. And frankly, my source couldn't be any better ;)

[Young Paul]

... which would be a reason for starting another route - 'cos the cost of training and product development would then be spread further.

Basically, what is being said here is that in terms of operating costs/income, the routes are OK - but in terms of overheads they aren't. The Concorde problem.

You can't get "a little bit" into longhaul - or the costs you are talking about will clobber you.

[WHBM]

ajamieson (and others):

Actually both sides could be right. The costs ajamieson describes are one-off costs that occur when a route is first started. Conventional accounting then recovers these costs over subsequent years. So on day-to-day costs and revenues the routes could now be doing alright, but to the accountants taking the overall view and recharging these "stratospheric" costs it is making a loss.

This is where management has to face the beancounters and decide what to do. On the one hand it appears ludicrous to abandon a profitable route where the start up costs are now history, on the other hand the money borrowed to cover the start up costs is eating away interest and has to be paid back somehow.

Remember, at the end of the day it's the management that employs the beanies, not the other way round!

[akerosid]

With bmi's adventure into long haul travel not being a complete success (although in fairness, that's partly due to it not being allowed to operate to US from LHR) and now, LHR's third runway likely to be delayed considerably, isn't it about time that MB and Branson finally got this merger thing worked out. Both are high quality carriers with networks that would complement each other; both would benefit from being part of a larger organisation and having the mutual feed.

Both must know it's going to happen sometime, so why not get things under way?

[Arkroyal]

bmibaby long haul Man to Miami. 'Trust me I know':}

[Brown Starfish]

bmi are deep in the brown stuff on longhaul and not likely to make progress as one of the main paddlers is Austin Reed who is apparantly more concerned about transporting his Xmas crackers intact with bangers in place than making decisions about the companys future. Where has he been for the last few weeks anyway? According to my impecable source, the legal eagle and finance director run the place between them and are doing a pretty good job without a chief exec. Give Reed a golden parachute without a ripcord!!

[shafted@work]

Thanks for posting the link for the airbus orders page. It is interesting to note that it show bmi as only having one A330 currently. which is of course incorrect!

It is very easy to obtain A340s quickly, by slipping another carriers option for example or leasing.

bmi is at a crossroad. Bishop will not want to carry on in his present capacity for much longer. He dreams of his own heavy metal trundling down the LHR Rwy carrying BA business pax across the pond - fair ambition I think. How will this be acheived??

Bishop thinks there maybe a way in to the transatlantic market from LHR on the back of the Virgin/Cathay proposition.

He knows branson would merge tommorow (that will remain up his sleeve).

How much more valuable will bmi be if it can get just the rights across the atlantic - let alone operate them? Branson would have to offer considerably more to Sir micheal.

Lets not forget that bmi is his retirement, why not play brinksmanship with potential suitors?? it makes perfect sense.

I Suspect that if he didn't think LHR long haul rights would come within the next two years bmi/virgin would already be one.

I recommend we all make a note of posters Ajamieson and Fly me again as they both definitely know inside information that is in complete contradiction. so either they are both full of hot air or one of them is the bish himself.............

I think there are three people in bmi who genuinely think they know the plan, I suspect one of them is quite capable of suprising the other two.

[teifiboy]

Copenhagen

What is your source that bmi's longhaul operation is not succeeding. Granted the Washington service is rather disappointing at this time of year. However, the ORD is in profit. Not bad after two years

[Anne.Nonymous]

Copenhagen

you're way off the mark.

Sublease at rock bottom prices

The SAA contract was an absolute winner - and the next contract will be too.

Chicago is full and making a good profit but Washington is slow regaining it's previous strength after the return to the route - not unexpected when you do that (but it was worth it).

As to long haul out of LHR, it would be good to see the A330's going to the US if the stranglehold can be broken but it doesn't preclude other routes from there. bmi is, after all, the second largest user of LHR - out of all the world's airlines!

Anne :O

[frangatang]

When bmibaby goes longhaul will the pilots be able to make their own sandwiches such that they wont curl up at the edges after
a 10 hour flight.And l hope they can bring a thermos big enough for the journey.(bmibaby=no crewmeals)

[Copenhagen]

Guys - come off it - The SAA adventure was seriously loss making, as was the brief period the A330 flew in my part of the world.

In a period when virtually all long haul airlines have excess capacity sub lease rates plummet - only those with seriously written down equipment can hope to make any money out of it (a certain Icelandic airline comes to mind, as does a certain 747 operator out of BOH). It was probably a great success operationally, but profit wise - it probably lost less money than a Manchester self operated service. Remember the EI 767 operation in Mexico? - a similar story that cost the airline a fortune in a less depressed period than this one.

Another problem with Miami is the lack of a strong Star Alliance base there - and the lack of high yielding traffic to those markets.

I'm waiting to hear that BMIbaby is profitable also, just like Buzz was!

[teifiboy]

Copenhagen
Just where do you get your info from?

The SAA operation was the saving grace of the long haul 'adventure' in what was a very difficult trading environment. I am not qualified however to comment on the SAS situation, as I do not have the facts about that particular operation. I presume you do from your comments.

[flymeagain]

TIEFIBOY: I agree with you:: Copenhagen, where do you get your info from???????
You've been listening to the caterers and cleaners too much!!!
The SAA was a great money earner for the company roughly £10 million, which covered the cost of the start up of the longhaul operation, (which is why I said origionally that they where now making a profit!), not only that, but it made more money than keeping the IAD opp for last winter. I just wish that I had a bubble to burst that ballon of yours but I'd be scared to get my head blown off with all that hot air inside!!

[scroggs]

I have no idea whether bmi's current longhaul routes are successful or not, but I am surprised that their focus is entirely on the USA when there are good profits to be made on other destinations from LHR, which bmi could service more easily. I get the impression that the SAA sub-lease has been an operational success - it seems that SAA were highly impressed with the A330 and may order some of their own - but whether it covered bmi's costs is another matter.

As for a 'merger' between bmi and Virgin, I think that's now history. Virgin's branding is far too strong to be risked by dilution with another company (as SQ realised), and getting involved with European-based full-service shorthaul seems to be a good way of losing your shirt. As far as I can tell from what's published here and in the newspapers, bmibaby is keeping the shorthaul balance sheet in the black, and baby would be very unlikely to be included in any deal. Virgin's current codeshares with bmi cover their feeder requirements in the UK; owning the airline wouldn't help their balance sheet or the passenger loads. As I see it, it ain't gonna happen - but RB and Bish could well prove me wrong!

[Goodness Gracious Me]

I totally agree with Scroggs. Why on earth would Branson want to merge his profitable long-haul airline with a second-rate, loss-making, short-haul airline? Feeder traffic? Well, the codeshare does that already.

A possible buyout by Virgin might be the only option but only so they can use the slots ex-LHR to increase long-haul routes/frequencies, and then sell everything else off. Why else would anyone buy a loss-making company which is already struggling against the low-cost carriers, to be made even worse if they build that 2nd runway at Stansted.

As for guys in bmi, the only way it would benefit them is if it goes ahead as an equitable merger - does anyone really think that will happen? Even then, there's nothing to say that there will definitely be any great benefit e.g. merging seniority lists, etc. At best, I think they'll continue to trade as 2 separate airlines, but under the Virgin brand. But, as I said, I think this is extremely unlikely.

Any other thoughts/comments? Would be interested to hear.

[Airbusbellboy]

Apparently ORD is something of a cash cow while IAD not doing so brilliantly although cargo keeps the dollars rolling in. As for the arguement of mgt. versus bean counters, let's just say there aren't a whole lot of beans to count. Yeah sue pax loads are high but yield per seat mile is abissmal which sees bmi in some cases/routes not even break even and hence a huge drive is on to reduce costs...... Big changes are afoot!!!!!!!!!

[teifiboy]

"second-rate, loss-making, short-haul airline"

loss-making, maybe, short-haul yes, second rate? If you are going to use terms like that, at least qualify them.

This business is tough at the best of times. What is the point of being derogatory?

[lamina]

"loss making"

I laughed so much I never thought my pants would dry!!

BM, bmi, or whoever, have never made a profit in 20+ years of existence (work it out). Well they did one year, and sold a share to Lufty!
Thats why a particular employee gets huge bungs when things are so tough. Its called accountancy, and done properly is a worthwhile exercise, just ask some shareholders?

[fast cruiser]

GGM

Who the F**K are you to talk about bmi as a second rate airline, bmi has been around for years and years and will be for years to come in some form or another.

It happens to be a VERY good airline to work for with a great bunch of flight crew, cabin crew etc who work very hard to keep the company going in one for the most competitive markets in the world.

Long haul is working and I'm sure more work will be found for the 3rd A330 soon, why they do not fly east from LHR? I don't know but they must have there reasons.

I agree with scroggs that I do not see a merger with Virgin in the near future but who knows, the slots that bmi have are worth millions and everyone has there price.

GGM - next time you slagg off another airline think before you write or maybe you should just try another planet ie PLUTO

cheers

fc

[Goodness Gracious Me]

FC,

Thank you for your "eloquent" reply.

Who the F**K are you to talk about bmi
I'm not going to tell you!! But I do feel justified in my comments which, I believe, do not amount to a "slagging off". Just common business sense. OK, second-rate might have been a bit strong but loss-making certainly wasn't - you can't deny that.

I agree that the flight & cabin crew are the best bunch of people anyone could wish to work with. Unfortunately, the powers that be don't seem to hold any of them in particularly high regard which is why no-one seems to stick around unless they're caught in the seniority "net."

[Tony_EM]

No, I think "second rate" is a moderately accurate definition of some of their upper and middle level management performance.

Aircrews are indeed some of the best around, despite their treatment, but the high turnover of ground staff and the dire training and support is well known in the industry.

The only reason that they are still in business is the profits made from the customer ground handling side and its subsequent sale to Aviance (then GHI), another second (if not third) rate outfit.

I've seen the corners they've cut, the regulations they've ignored and the immoral treatment of staff for myself (and wouldn't mention here unless I had solid evidence to back it up).

Since this is a rumour network, I'll throw the little figure of £100k monthly losses through ticketing f**k-ups, due to the same high staff turnover, shoddy training and dire management.

I would say that this is, and has always been, a company with great potential, once you get rid of the middle management yes-men and head in the clouds big bosses, and put some qualified people-motivators in place.

Tony (Joined bmi in 93)

[Red 69]

Well said Tony, you're spot on with your remarks!

[Max Angle]

GGM,

Depends what you mean by "loss making". The balance sheet has occasionally shown a loss and the years when a profit is shown it is normally not a large one. HOWEVER, one does not get to the Bish's position in the rich list by running a company for 30 years that has never made money. The bloke (and the other private shareholders) are worth millions, between them they have ownership of several off-shore leasing companies that own, outright, a large numbers of bmi aircraft and other assets. I believe that two more 321's have recently been purchased from the original leasing agents to add to this portfolio. That and other legal scams mean that huge amounts of money vanish out the back door before they hit the bottom line, (Donington Hall lease charges, Jersey Handling, Fokker engine leases etc. etc.). At the moment operating margins and profits are under huge pressure but there is no shortage of money sloshing around and never has been.

Tony M.,

Quite correct, an accurate summary of the situation the company is in. Nothing will change with the current upper managment in place and while we are still run from the sleepy hollow of Donington Hall (no Little Blue I don't mean ops.). The parochial, and out of touch attitude that pervades up there along with 1950's style admin. has shackled the company for years.

[Goodness Gracious Me]

Tony_EM & jetset747 - glad you agree!!

Max Angle - I'm referring to recent times. I agree that Bish's men are some of the finest at "cooking the books" but I can't imagine for one second that they didn't actually make a loss last year. Normally, they'd plead poverty by expecting the troops to believe that the company has lost or made a very small amount (e.g. <£3m). However, last years posted loss of £24m (the company's biggest loss) was a huge increase on anything previously seen. As Tony_EM mentioned, much of the profits in recent years have been from the sale of extraordinary items such as the ground handling, spare engines, etc. This year, the cupboard was bare - that coupled with a pretty harsh trading environment means, I believe, they must have lost some cash along the way. Next years projected loss of £10m+ is not all that inspiring either.

Also, don't forget bmi are continually propped up by an agreement between themselves, Lufthansa & SAS (called the ECA, I think) whereby the stronger airlines will help to financially bail out the weaker ones. Lufty & SAS are apparently fed up chucking money bmi's way - last year's loss would have otherwise been £70m+ were it not for this agreement.:uhoh: On the flip-side though, you have to give full credit to Sir Bish for getting into that agreement in the first place!!

I do agree that, generally, things are made to appear a lot worse than they are. Sir Bish has never been short of a bob or two & has certainly got a nice big pot of gold stashed away somewhere a.k.a. his retirement fund. How far he'll dig into it to keep things going is anyone's guess.

From Fast Cruiser:GGM - next time you slagg off another airline think before you write or maybe you should just try another planet ie PLUTO Maybe I'm not talking about another airline.....;) (What's Pluto got to do with anything?)

[Little Blue]

Hey Maxy,
You've made my day !!!!
:D :D :D

[Anthony Carn]

Very good post Tony_EM.

Well worth a careful read for those who've merely skimmed to this point.

Goodness Gracious Me, I don't really think that only jetset747 agrees with Tony_EM, as you are perhaps attempting, rather badly, to imply. I would suspect that Tony_EM and 100% of the workforce endowed with more than one brain cell and a backbone are in agreement. Those emloyees with the qualifying biological attributes are arguably thin on the ground, though.

I quote Tony_EM
I've seen the corners they've cut, the regulations they've ignored and the immoral treatment of staff for myself (and wouldn't mention here unless I had solid evidence to back it up).
If you've seen regulations ignored, then should you not have reported these to the relevant authorities? You may interpret that as a criticism, Tony_EM, but it's intended as a question/suggestion. Under that heading, would you include the method used to recruit "volunteers" to bmibaby from bmi mainline employees, for example?

[Tony_EM]

If you've seen regulations ignored, then should you not have reported these to the relevant authorities?

I most certainly did. But when I confided in a superviser, he turned sour when he got promoted and lead the effort to get rid of me (probably part of his management training), which they did. I contacted a number of authorities, the typical outcome was a couple of inspections and the company being asked if they were doing things properly, which they unsurprisingly answered; "Of course!", so the authorities said "ok"!?!?.

It is why I don't believe in self regulation in this industry anymore, and why I think there should much greater oversight and enforcement of regulations, especially in ground ops. I can't comment on maintnance or aircrews, other than to point out that there have been a number of worrying incidents in those areas too. I spent a long time pondering the merits of 'going public', but concluded that the gutter press would just use it to damage the industry as a whole (in order to sell papers of course), rather than to champion the cause of getting the system changed. My worst fear is that it will only happen once an aircraft is lost. Since my old companies are faithfully re-creating the circumstances of ValuJet and other accidents, I don't think it is 'if' but 'when'.

Some of the magement practises beggar belief, and it makes me shudder when friends tell me that it has got a lot worse since I left.

I got sold off to Aviance (GHI) with all the other 'equipment', so did not witness the usual cr@p during the creation and running of bmi Baby, but I still have my sources. Unfortunately, At Aviance we got the same managers and culture but worse. I got a final and written for 'dissent' to a superior and finally walked in protest. Good in principle, but it was just one less headache for them.

It (Baby) always looked to me like another one of Hogans 'Chop n' flog' efforts. I've heard plenty of stories where mainline staff and equipment is being used for Baby without records, no doubt to bolster the percieved productivity and profitability of it for any potential buyers. They did the same with the handling bit before they sold that.

Same ol' same ol'.

[KAT TOO]

Gather that washington is going back to 6 days per week PDQ after pressure from the cargo boys and better than expected load factors i also hear that Jersey handling picks up £1500.00 each time an Embraer lands, which in Summer is a lot, often with not a lot of Pax's still its a private airline so(within in reason) bish and co can do pretty much as they please. Good luck to them they have seen lots of wannabes off over the years.:cool:

[egnxema]

This is probably one of the best, most informative, interesting threads I have read in this part of PPRuNe!

I notice that bmi publish there load factors and pax figures each month en-masse. They don't break down mainlne, regional and baby.

As a guess I would imagine that baby's load factors are the highest, so by lumping all three divisions together you end up with a figure that is reportable via press release.

If they were listed separately ............?

As soon as baby get their own AOC I think they would be better off out of bmi mummy.

[rampman]

All i can say is that the flights today to IAD AND ORD were about 90% full and they were ramed with cargo off and on ... i say there are doing very well ....and the spare are craft has been re-sprayed in star aliance colours and is on stand71 with both engiens on it :ok: the rumour is they might be starting MAN - LAX or even DENVER fom spring next year

[teifiboy]

been resprayed in star alliance colours? don't you mean had the SAA stickers peeled off?

[rampman]

nope resprayed ... it went into fls hanger before it went to south africa in SAA colours ....... then went back in when it returned to be turned back into BMI/star aliance .....