bmi / Virgin again???

[Faulty]

http://quote.bloomberg.com/apps/news?pid=10000102&sid=aWqOx8K_SHGc&refer=uk

So soon after Virgin Express & SN and along with
rumours ref bmibaby and Flybe seems something’s brewing??

[CaptJ]

"A BMI spokesman declined to comment."

So, it's true then.:E

Possible Senario -
Mainline routes go to Virgin
Regional Routes go to FlyBe
bmibaby sold to fund Heathrow slots.

What do you reckon ?

[surely not]

With BMI attacking Virgin on the Indian routes I doubt that relations are that cordial between the 2 companies.

Surely if Virgin wanted to start low cost operations in the UK it would use Virgin Express rather than re-invent the wheel?

[Count von Altibar]

I think that it's only a matter of time until the merger takes place. It just makes so much sense.

The Count

[Max Angle]

We hav'nt got the Indian routes yet and the word on the street in the company is that we won't get them. CaptJ's scenario sounds entirely plausable to me.

[alterego]

The only flaw I can see in the above plan is that will effectively put BMI board out of work!

Can't see Austin reid or SMB giving up all their toys in one go.

A Flybe/Baby merger has also been discussed before. Might make more sense if Flybe and Regional/Baby merged with BMI being more in control.

[lexxity]

Austin reid is getting ready for retirement, wouldn't a merger prove to be a nice handshake (sure beats a carriage clock). There has been talk of this merger for sometime, it would not suprise me if it happend. The India routes have indeed not been granted yet, i suspect a VS/BD codeshare on these will be the outcome.
Virgin are selling A LOT of seats on the carribean routes from MAN not as a codeshare YET, but I wouldn't be suprised if that suddenly happend, still over a month to go before the first one. Don't forget MAN/BGI was VS license first. Hmmm......



Probably good that I like the red uniform :E

[Lizzie]

Better be quick about it, whatever they do. Resignations from the FOs seem to have accelerated this week.....daren't even guess at how many, but the lack of concern shown by management indicates that there is something afoot...!

[keepitlit]

i think it was about 10 in just over a week,heard this second hand so could have grown a little

Rgds K.I.L.

[Scottie]

Where are they going? BA? Virgin?

Or are they coming across to the Orange side?

[Tea White None]

And how many more are waiting in the wings to go to BA/Virgin???

Does this mean that they will now recall the mainline crews who are still at baby now that baby have got some fresh meat from Oxford, or will they have to start looking elsewhere to fill these positions?

If there was something going on between bmi and Virgin, I doubt very much that anyone would want to jump ship just yet and sacrifice carrying over any kind of seniority, but then again, what do I know.

[expedite_climb]

I know at least 5 are going DEP 744 for BA.....

[keepitlit]

and Vs are interviewing this week


rgds


K.I.L.

[Goodness Gracious Me]

but the lack of concern shown by management indicates that there is something afoot...! Actually, it indicates nothing at all. In fact, it's a perfectly normal reaction for bmi management - they've never given a monkeys when anyone's left the company. If anything, I would expect they're happy to see the wage bill drop.


i suspect a VS/BD codeshare on these will be the outcome Hmmm, not so sure. VS have recently ordered a huge number of aircraft for delivery over the next few years so I would think they would quite like the routes to themselves, thank you very much.

:E

[ALLMCC]

If its not a silly question, how many more can depart before there is a serious problem with crewing levels?

[Tea White None]

Is this the start of the mass exodus that was so heavily debated not that long ago?

As ALLMCC has asked, surely bmi cannot sustain this kind of loss, especially if there are more out there just waiting for the call to go elsewhere.

I wonder what bmi's next step will be to prevent more people from going. Perhaps the whole pay issue might now be resolved... or is that wishful thinking?

[lexxity]

I wonder what bmi's next step will be to prevent more people from going. Perhaps the whole pay issue might now be resolved...

HA HA HA HA HA ROFLMAO:p

bmi management need to climb down out of their ivory towers first.

[Shanwick Shanwick]

A VS Commercial Briefing I attended last week would indicate that the BMI deal is back on as a takeover rather than merger. The final seniority list would be interesting!

[scroggs]

This keeps coming up...!

In previous versions of this discussion, I've warned that any 'merger' between Virgin and BMI would in fact be a takeover of BMI by Virgin. I maintain that position.

Any such merger is unlikely to work in BMI's favour. It is highly likely that the company would be divested of non-core business in the way that CaptJ suggests, and that only the most profitable mainline routes (and a proportionate - i.e. minimal - number of employees) would be absorbed into Virgin's structure. Virgin has no interest in operating short haul just for the sake of it - however much such a 'synergy' appeals to those inexpert observers who see Virgin's raison d'etre as being a competitor to BA in all its markets. It ain't so! Virgin's real interest in BMI is their slots at Heathrow, and nothing else.

In all cases of planned company takeovers that I can recall, there is evidence, well before the fact, of the subject company making itself more attractive to potential suitors by reducing debt and costs and suchlike, and ridding itself of elements of its business which are unlikely to fit in with those suitors. I see no such activity at BMI. In fact, it would be fair to say (from current employees' remarks) that there is little evidence of action of any kind from BMI to either improve its chances of survival, or to prepare itself for sale!

The BMI Caribbean routes from Manchester are reliant on Virgin Holidays contracts, which went to BMI because VS could not provide equipment to operate those routes - though they were planned and slots had been bid for. At some point those contracts will eventually be flown by Virgin, whether there is a 'merger' with BMI or not.

The India-UK market is potentially large enough to provide both BMI and Virgin (and many others) with lots of revenue. As the flights and operators are effectively determined by the two Governments, there is no reason for this market to be a bone of contention between the airlines at an operational level. As an aside, Virgin is apparently looking to operate to Bombay from February 2005.

[Goodness Gracious Me]

Well said, Scroggs! Hit the nail squarely on the head.

:ok:

[lamina]

Scroggs

Because I have a life outside of aviation, I have limited time to construct what I would consider to be a reasoned speculative piece on a proposed bmi/virgin get together.

However, reading your post leads me to believe that any speculation by myself or others is a waste of time. Would I be correct in my asumption that your real name is Dicky B.......?

The reason I ask, is that your contention that- "synergy' appeals to those inexpert observers who see Virgin's...." could only come from one with an incredible indepth knowledge of Virgins masterplan. Or are you just speculating like everyone else, in which case your piece is just that, speculation, albeit with a touch of arrogance thrown in?

[Count von Altibar]

What you say scroggs could be correct but nobody has a clue really except the people at the top of both companies. Also, whatever the outcome we will just have to go with the flow because bmi hold all the cards. They're the ones with the slots remember. The business leaders will dictate. Not the pilots.

[scroggs]

Yes, you're both absolutely right! I have to admit to being a mere speculator, the same as most other observers. However, my speculation is from within, so to speak, though I have no inside track to those who make the decisions. Perhaps it would be more accurate to compare my speculation to the city pages of the broadsheet newspapers?

However, I don't - at this stage - have any reason to retract anything I have already said.

[acbus1]

If there was something going on between bmi and Virgin, I doubt very much that anyone would want to jump ship just yet and sacrifice carrying over any kind of seniority, but then again, what do I know.
Jumping ship before a takeover is the better option. The takeover suggested here would inevitably lead to mass redundancies, flooding the job market for a year or two at least.


If its not a silly question, how many more can depart before there is a serious problem with crewing levels?
You mean a more serious problem than the permanent serious problem, I assume.


.........there is little evidence of action of any kind from BMI to either improve its chances of survival, or to prepare itself for sale!
So what's new -- bmi is a rudderless ship/headless chicken coasting along on Heathrow-slot-supported autopilot!
(and still losing money fast.......or is that just an accounting ploy to divert money to certain bank accounts?) :rolleyes:

[lamina]

inevitably lead to mass redundancies,

Now that is spectacularly speculative specimen of speculation and would be a spectre that would leave me speechless.

:ooh: :ooh: :ooh:

[chipsbrand]

Scroggs, you have made some very interesting points. But equally relevant is that the entire BMI group is amost joint owned between SMB (and his associates) and a consortium of SAS and Lufthansa. SMB and his associates own just one more share than SAS/LH. What possible interest would those airlines have in effectively selling LHR slots to VS?

My own assessment is that it is most unlikely that they would agree to any such thing particularly as BMI has gone through a substantial integration with Star Alliance, which includes systems integration, LH suppport for systems used by BMI, code sharing with numerous Star partners, including on MAN to the USA.

Branson has said that acquiring another business, as he did with what became VEX is always much more difficult than developing your own.

I am certain that VS want more LHR slots but there are other ways of getting them than buying bmi. Particularly as in order to preserve those slots bmi wouldd have to go on operating on a large scale at LHR for many years before VS could possible use them.

[acbus1]

Now that is spectacularly speculative specimen of speculation and would be a spectre that would leave me speechless.
That comment of mine inevitably lead to mass redundancies was based upon previous histories of mergers and takeovers.

Give examples where mass redundancies have'nt occured.

[keepitlit]

Please forgive me but do long haul aircraft not need more crews than a shorthaul!About (10 compared to 5)!!

So if some slots where stripped down from bmi routes after a merge/takeover then forgive my basic maths skills but that would actually means they really need more pilots!!!!

So VS would have to think about recruiting,wouldnt they!!!

oh, just like they are doing at the minute!

And the rate notices are being handed in at bmi,ill let you bright boys work that one out for yourselves!!!

Im off to have a long think about this one to keep up with all the V/S hotshots with all the inside info.

Rgds K.I.L.



:E :E

P.S. theres room for everyone:ok:

[scroggs]

I am certain that VS want more LHR slots but there are other ways of getting them than buying bmi. Particularly as in order to preserve those slots bmi would have to go on operating on a large scale at LHR for many years before VS could possible use them.

VS are of course always in the market for new slots however they might come up, and there may well be easier ways of obtaining small numbers of slots - but BMI own lots of slots, and they are (at least sporadically) talking to Virgin. I'm not sure that BMI would have to continue operating under its own identity for a period before the slots to passed to Virgin, but I don't doubt that there would be one hell of a bunfight once any such plans were announced!

Don't get me wrong; I'm not advocating a takeover of BMI by Virgin. I personally think it would be disastrous for much of BMI, but I am speculating that it is only along the lines I mentioned in my first post that Virgin would consider any significant financial involvement with BMI. The financial risks of any other format are probably too great - and Virgin is not in this business to lose money. It will be interesting to see what actually transpires...

[Virginia Plane]

ACBUS1 - Caledonian/Flying Colours/Airworld springs to mind without looking back too far.

[Scottie]

or even go/easyJet

[330-Purser]

bmi have been on a cost-cutting excerise for as long as I can remember now.

They've recently announced redundancies in the Reservations Centre by outsourcing the whole lot to India, no-one (apart from staff travel so they can do SMB's personal bookings of course) spared in the cull. From what I hear they are all in consultation at the moment but due to be laid off by next spring.

But then again, would they need a reservations centre if there was a Virgin take-over? I think not ;)

[acbus1]

Give examples where mass redundancies have'nt occured.
ACBUS1 - Caledonian/Flying Colours/Airworld springs to mind without looking back too far.
Perhaps I should have stipulated that sensible/comparable/normal examples should be given.

Hey ho! You carry on based upon your assumptions.

I'll sit and watch the carnage after the takeover .......sorry, "merger".

[Virginia Plane]

...and what's so wrong with the examples that we have quoted?

[gayrugbybloke]

Isn't it the case that Virgin and Singapore are moving terminals at Manchester, to T1, in order to join BMI. I have herad that the BD Caribbean and Las Vegas services are to carry VS flight nos. similar tot eh way that the SQ Manchester servie already does.

Also, I heard a rumour that Virgin are to commandeer some some accommodation at Manchester Airport in order to create a Clubhouse for their Upper Deck passengers.

[alterego]

Isn't it more true to say that BMI's main asset is its slots and this would make it attractive to potential mergers/takeover?

Surely that is one reason why LH/SAS got involved in the first place. Are there others who may be interested in getting more slots?

There is a finite time that BMI can lose money before the management cash in it's assets. Baby is being seperated more & more each month ( own AOC,soon own crewing, option 3 ending ). It does look like something is going to happen to the group!

[colegate]

I do not know exactly how many slots bmi have at LHR but it looks to me as if they have 25 Airbus aircraft based there. This is likely to give rise to around 75 departures per day. The last published slot sale deal at LHR involved Qantas which bought slots from Flybe and paid £24 million for two daily arrivals/departures. It is interesting to do the maths of this on bmi. The figure is 75 multiplied by £12 million. On that basis bmi would be worth £900 million.

[Lizzie]

Can I point out that a seniority number at bmi counts for absolutely nothing, other than for the purpose of 'last in, first out'.

Next, an FO at bmi (or Capt!) has the decision to make, and soon:

Would you rather have a bmi seniority number, high up as it may be, and await the merger/takeover/collapse of bmi and hope to be offered the A340........

or....

Jump!! Go to BA/VS, asap and get some bums behind you (for LIFO purposes) and be on the Longhaul aircraft when the bunfight begins?

Quite honestly, bmi management seems ambivalent to either course of action from it's pilots. Leadership? Management? Hmmm!

Discuss.....!!

(ps my applications to both are simmering in the pile..!!)

[pinhammond]

Does anyone have any views about the effect of the recent board changes at bmi on any possible deal with Virgin? Reading all of the postings on this site it seems that bmi people are very frustrated but their company seems to be valuable even if it has lost a lot of money. Whay do people seem to assume that Virgin is the stronger company? It, too, has lost a lot of money over the years.

[330-Purser]

It appears to me that the main reason AR left the board at bmi was due to the fact that he probably didn't want to hang around for the company to be sold off or shut down. Lets think about this for a moment, he wouldn't have had a seat at the VS boardroom table for long would he? He was due for retirement next year anyway.

On the subject of bmi slots, don't forget that the company has many unused slots at LHR and even some rare night slots. They have had them for many, many years and have held on to them keenly. I would easily think the slots alone must be worth close to a billion.

As for the India announcement, what is that all about? There has to be something more to operating those routes out of LHR, something that VS would probably want to do themselves. And the rumour is now that BD want to operate the A340 on the route? Wonder if these could be repainted from a current shiny silver livery by any chance?

[Torquelink]

RB said that not setting up a low cost shorthaul airline from scratch (Virgin Express) was a huge mistake as you can't take cost out once its in. He compared VEX with Virgin Blue and plans for Virgin America. Buying high-cost BMI wouldn't seem to fit with this philosophy - unless it was for the value of the LHR slots alone.

[Young Paul]

As LHR operators go, bmi is low-cost.

[pinhammond]

I have some difficulty in believing either that Virgin will be able to acquire bmi or that any transaction between the two companies will be easy.

This is not an exhaustive list of issues that will have to be addressed but it does include issues that will focus the mind.

Virgin is an organisation in which the importance of the brand cannot be underestimated. The Virgin brand is Richard Branson’s symbol of success. It is impossible to believe that he will ever let it go. That also means that he will want to control it under all circumstances. If you talk to people in Virgin I am sure that they will echo this view. My contacts in that company certainly do. The whole industry is certain, nevertheless, that Virgin wants many more slots at LHR. These could be bought from bmi without having to buy the company.

I once met Sir Michael Bishop. It was at a meeting at which he fiercely defended both his own interests and those of the company that he effectively created. I cannot imagine that he will ever do anything else. Why should he? He has also made a large amount of money out of aviation, probably more cash than anyone else. The sale of British Regional to BA guaranteed that. I am sure that he knows full well what his company is worth and he will want cash out of any transaction. Lots of it, probably.

What did Lufthansa court bmi to the point that they won against an alternative offering from Air France? My guess is that they saw the opportunity to have a go at BA on their home ground. It was widely rumoured in the days of Marshall and Ruhnau that the two men could never even speak to one another. The last time I met a Lufthansa manager he expressed very substantial contempt for BA. But another option must have been the chance to create a Star Alliance hub at LHR.

What do SQ think about it all? To make any deal work at all they would have to subscribe to some new shares. Why should they when they have probably had very little return on their investment in Virgin so far?

Across all industries agreed mergers rarely work. To be successful they have to be hostile. But how can you have a hostile take-over of a private company such as bmi? It is impossible.

How do you reconcile Virgin interests, Bishop interests and Star interests in any merger deal. I cannot see it. Equally I cannot see why LH/SAS would agree to bmi selling slots to Virgin, a carrier that they must see as a dangerous upstart.

The idea of VS and BD getting together sounds great. But the obstacles are huge.

[Val d'Isere]

You lot do complicate things!

bmi is losing money in bucketloads and demonstrating little or no ability to solve the problem. Not only bad medicine for MB, but extremely damaging to Lufthansa and SAS, who have to foot a chunk of the bill. The losses can't continue. Something has to give. LH and SAS may well be glad to be rid, or may negotiate a slice of the spoils after the carnage. It may be just the lever they've been looking for to rid them of MB.

Que Sir RB and his big bank account.

Merger, no.

Buyout/takeover, yes.

Motive -- Heathrow slots, pure and simple. bmi's fleet, shorthaul operation and pilots are of no interest to RB whatsoever.

[Young Paul]

Oh, for goodness' sake.

Suppose for a minute that Virgin does take over bmi. Supposing all it wants is slots. The first problem Branson has is that for each shorthaul aircraft he takes out of service at LHR (there are ... well, let's say 20), he will need about four longhaul aircraft to service the slots. And for each longhaul aircraft, he will need twice as many crews than he would for a shorthaul aircraft. So let's say just one bmi aircraft is taken out for using the slots. The requirement for crews goes from five to forty. Oh, and the crews are bigger too. And the slots have to be kept going, otherwise they are lost, I believe, so this process would have to be gradual as new longhaul a/c are phased in.

So Branson wouldn't have to use many of the slots at LHR for longhaul to suddenly find himself needing a lot of pilots. bmi pilots are paid less than Virgin ones, I believe - he would be a lot better off keeping them on their existing contract (if he could get away with it) and gettnig them to work for him than making them redundant and then probably having to re-employ them in short order anyway. And bmi pilots are generally "high-cycle" pilots with pretty good operational skills, I understand, and who are well-regarded in the LHR operating environment.

That's why, regardless of other examples of "take-overs", I don't think that bmi pilots would have anything in particular to fear.

But any "takeover" would have to be with the consent of the shareholders - remember, it is not a plc - do Sir Michael/DLH/SQ appear to be getting cold feet? 'Cos that would be necessary as well.

Also, I seriously doubt that bmi is losing "bucketloads" of money.

[pinhammond]

Val D'Isere-

I do not think there is the slightest likelihood of bmi facing any sort of imminent crisis. Airlines habitually lose money and survive. bmi has demonstrated admirable survival skills over several decades. Even if it was running out of cash it only has to sell a few slots at LHR to keep going potentially for years.
Do not underestimate the determination of Sir Michael Bishop to ensure the survival of his airline and to add long haul routes. Those are believed to be his dearest ambition now.

Sure, Virgin will need more slots at LHR and they may well have to buy them and bmi MIGHT be a source. But to buy the company just to get its slots is absurd.

I have done some calculations and on the assumption that Virgin is able to acquire one additional long haul aircraft every two months indefinitely into the future it would need between 80 and 100 additional long haul aircraft to be able to use up the bmi slots at LHR. (The exact figures depend on the sector lengths flown) On that basis they would take between 13 and 16 years to use up the bmi slots. As of last May they had 30 operational aircraft. If they acquired bmi they would have to use the slots or lose them. Patently it is absurd that they would take over bmi and shut down short haul operations. That is an impossible scenario.

Another complication that I did not list before is the position of the regulators. bmi currently provide the only domestic competition for BA out of LHR. Any loss of thet competition would appal the regulators and you can be sure that they would do whatever was necessary to ensure that that competition continued. That process would certainly include a reference to the Competition authorities and past precedents that any "merger" would be conditional on slots being released to new entrant competitors. EasyJet, Ryanair, Air Berlin, bmibaby, frankly everybody would then jostle to get on those domestic routes.

No, the rumours are wishful thinking by people who seem to want the demise of bmi and that ain't going to happen.

[Val d'Isere]

bmi is losing money fast and MB's bank account is taking the hit.

LH and SAS must be losing patience with having to pay out their share of the losses.

The pressure is on to either restore profitability or get out of the business.

.....any "merger" would be conditional on slots being released to new entrant competitors. EasyJet, Ryanair, Air Berlin, bmibaby, frankly everybody would then jostle to get on those domestic routes.
Hence RB can achieve his aim of as many LHR slots as he judges he'll require, operate shorthaul on those slots as longhaul gradually replaces them and leave the remainder to the shorthaul vultures.....for a price.

In fact, as a separate venture, bmibaby could become EasyVirgin* from LHR under RB ownership, though lo-cost from LHR would, I strongly suggest, be somewhat misplaced, to say the least.

For RB to "buy" bmi for the slots is not absurd.......it depends upon the price versus the value! That's called, simply, good business (not to mention common sense)!



*OK, I'll admit that "EasyVirgin" is a contradiction! :}

[bmibaby.com]

And where exactly would a merger between bmi & Virgin leave two of bmi's subsidiaries - bmi regional & bmibaby?

Here at baby we're always the last to find out about anything, but would anyone care to speculate what will happen?

We keep being told that we're being seperated far from mainline, with rumours of a sale to another no-frills airline, a change of ownership (getting rid of the bmi from the name) & about expansion with a different fleet type. All of it seems idle gossip, but its always interesting to know who knows more, and usually PPRUNe finds it out about 2 weeks before the rest of the airline does.

[keepitlit]

:E Val

Whats your beef!
Sounds like you have a problem with bmi,its Crews and the prospect of a possible merge.
Maybe scared of loosing a few places on a Seniority List!
Or is it the competition with" good crews with respcted training system".
As for bmi loosing money, I presume from that statement you fill in your own tax return!
The bish is light-years ahead of you and your small predictions, just remember he has already done the long haul many years ago.

I hope that your flying has no reflection on your postings.

Rgds K.I.L.
:E

[pinhammond]

bmibaby-

As I do not think there is any likelihood of Mainline being sold to Virgin I am sure that it is pointless to speculate on the consequences of such a transaction of the other companies (baby and regional). But commonsense says that if mainline were soled large scale funds would be available to Sir Michael to develop these two businesses.

The much bigger question is about whether baby has sufficient strength to survive and prosper in a market which is getting tougher with each day that passes. In such conditions history tells us that airlines in clear and distinct niches will be OK. Airlines that have critical mass and real strength will also be OK. The problem comes when the airline neither has a distinct niche nor critical mass. Ask yourself What is baby's niche? It operates (or will operate) a limited range of services out of four UK airports. (EMA, MAN, CWL and BHX). It is up against head to head competition on all except CWL. I think it is trying to do too much and it therefore needs to concentrate its resources.

While it is so fragmented it would not be an attractive buy for EZY or RYR. but it might appeal to someone like Air Berlin. A merger with German wings is also a possibility but I am not sure what strength could be wrung out of such a business. In the meantime good luck with the rumours thast cllearly abound in your company.

[thegoaf]

Val,it is not pilot's jobs that are at risk. The jobs at risk are virtually all those who work in that sleepy valley at Castle Donington ( Donington Hall and Hastings House). The chances of therm getting other airline jobs in that part of the world must be very slim.

[Shamrogue]

Hi Pinhammond,

Critical mass dosen't even gaurantee success with both Delta, United, US Airways all struggling.

On the otherhand, Southwest, Ryanair and Jetblue all use their critical mass to their advantage. So, it all comes down to cost, bottom line and service. Baby offers a great service, the routes are building and they come from a nice family. Ultimately on the routes they currently operate they should know the market better than a new entrant so their in a strong position to take on a good fight. The only cloud being their costs! If they are much higher than Ryanair, Eazy etc, obviously they need to look over their shoulders.

Like the 3 rules of property, location, location and location. LO-Co's have a similar tone............cost, cost, cost.

Cheerio

Shamrogue

[PAXboy]

Sure, Virgin will need more slots at LHR and they may well have to buy them and bmi MIGHT be a source. But to buy the company just to get its slots is absurd. Oh, I don't know, it's a plan that BA has followed assiduously for many years. ;)

However, it is the merger and the balance between long and short haul that makes the sense of this and that is why the rumour continually resurfaces. I would suggest that the full suite of International/Regional/Domestic/Baby would be a problem and many have speculated as to where they will go. Something will HAVE to be sold off to balance the books and pay for the redundancies, which will be a neccessary part of the deal.

What I think is the highest probability, is that a merger will take place. However, it will have to wait for some years. Probably until one of other of the leading lights of the two organisations is no longer occupying the chair at the table that they currently do! I do not wish ill health on either of them, as both have done incredibly well. But, it appears from afar, that it is their personal success that prevents them from walking across the bridge and bringing greater success.

--------------------
"I tell you, we are here on Earth to fart around, and don't let anybody tell you any different." Kurt Vonnegut, Jr

[pinhammond]

Shamroque,

I know many people who have used baby and they tell me that the service is good. That applies for flights from Nottingham, Manchester, Teeside and Cardiff. The only complaint that I have heard is about prices from Cardiff. But when my friends do not like the price they just go to Bristol and get EasyJet instead. It may be cost etc for the operator but for the traveller it is all about price and there is virtually no brand loyalty.

The baby critical mass is obviously total at Cardiff and I think it unlikely that any other airline would think seriously about taking them on there. But at Manchester both GB airways and Jet2 think they must be vulnerable and Flybe obviously fancy their chances at Birmingham. Ryanair obviously have critical mass at Stansted to the point that no new entrant would seriously think of challenging them there unless they had something going well for them. (A good example would be Air Berlin who have a strong home base in Germany).

US Airways has been a basket case for many years and in my view survival is unlikely.

Delta have made some serious mistakes. One of them was trying to compete with American at DFW. AA has critical mass there and Delta has no prospect of ever getting it. Thay have now recognised this and are withdrawing from DFW. Never underestimate your competitor is an elementary rule in air transport. Delta's failure in that has cost them very dearly.

If baby can get a grip over their costs and continue with their excellent service start and build up some good networks at UK airports where they are the dominant so-called low cost airline they have the prospect of doing well. I wish them luck.

[chipsbrand]

PAXboy.Ultimately only two things matter in amalgamations. Price and personalities. You have dealt with the personality issue very convincingly. Does anyone believe that Virgin could find 1 billion in cash to pay for bmi because I do not.

[scroggs]

I agree almost entirely with pinhammond. Virgin's brand is its primary asset, and the Virgin Group will not countenance the dilution of that asset under any circumstances. That is why a 'merger' with bmi is out of the question from Virgin's point of view. A takeover of bmi would only be possible with the agreement of all five shareholders (RB, Bish, Singapore, Lufthansa and SAS). RB and Singapore may be keen on the deal, but SAS and Lufthansa would want to see some return - or at least an end to losses - on their years of investment. Sir Michael, I imagine, wants to see his brand continue in some form or other after his retirement.

There is also no question of a wholesale transfer of slots or other assets to Virgin even if a takeover were desired by all of the shareholders, as (as has been suggested above) other airlines would probably be entitled to an opportunity to bid for the slots. Equally, Virgin could not use all those slots for longhaul routes. It's not a matter of aircraft or crews, it's a matter of international route licensing agreements; they don't appear overnight!

There could also be no easily acceptable way of Virgin absorbing bmi's flight deck community. With bmi being considerably older than Virgin, there are pilots at bmi who have far more service than the most senior Virgin pilots. If Virgin were to finance such a takeover, it would not accept bmi's pilots moving ahead of its own in the combined seniority list.

A far more likely scenario (should any of this ever come to more than a discussion point!) would be for Virgin to take over some or all of SAS's and Lufthansa's shareholding in bmi (and maybe some of Bish's, if he needed the dosh!), and for a long term, very gradual, shift in bmi's business focus to begin. I think bmi baby and regional would be sold off as a going concern with their own AoC(s), and slots would be dripfed to Virgin over time as lossmaking LHR routes were scrapped, and as Virgin could use them. bmi would retain some longhaul, but perhaps either as a specialist niche player in certain high-value markets or, alternatively, as a low-cost bucket and spade carrier. The two companies' seniority lists would remain separate.

However, as I've said earlier in the thread, I really don't believe any of this will happen. The personalty issue is just too big, and the regulators would screw it anyway!

[pinhammond]

I have been away for a couple of weeks and am just catching up with this thread again. I was very surprised to see that no mention has been made of the deal between BAA and various airlines about the use of LHR terminals after T5 is opened. Apparently T1 is to be used exclusively by Star Alliance airlines. It is to be redeveloped including the construction of more stands. It will be the only terminal used by Star airlines at LHR. There will be no room there for Virgin, who will be at either T4 or T3. If ther ehad been serious discussions between bmi and VS any such announcement about Star at T1 would have had to be delayed. I think this puts the last heavy nail into the coffin of speculation about any merger between VS and bmi. It will not happen.

Rumour has it from Crawley that there is dismay in a certain headquarters building about the trading position and about some lost opportunities which will have set back the company.