bmi announcement

[Scottie]

From bmi's website.....

bmi british midland reports profits increase to £12.4 million


bmi british midland today reported an increase in pre-tax profits of 51.2 per cent to £12.4 million (2000 = £8.2million), on a 2.4 per cent growth in revenues to £756.9 million (2000 = £739.2 million) for the year ending 31 December 2001.

Passengers carried declined by 5.2 per cent to 6.7 million (2000 = 7.1 million) as a direct consequence of the tragic events in September. The company estimates that £35 million revenue was lost as a result primarily through a significant drop in transfer passengers through the Heathrow hub post 11 September.

The company incurred an operating loss of almost £12 million for the year that was mitigated by the net effect of several exceptional items. These included the sale of the company's handling division, the write off and advanced depreciation of business systems and equipment, pre operational transatlantic launch costs, redundancy costs and the migration to Lufthansa reservation and business systems.

Sir Michael Bishop, chairman of bmi british midland said:

"2001 was a defining year in the aviation industry and one of marked contrasts for bmi. Prior to 11 September we had already commenced a restructure of the organisation in the light of softer trading conditions which had been evident earlier but we were still anticipating achievement of our budgeted operating profit. Subsequently we were obliged to take more radical action with reductions in capacity and a substantial redundancy programme, and ended the year with an operating loss.

“In spite of the increased difficulties in the market place post 11 September and the UK Foot and Mouth outbreak - particularly in the North West of England - we are extremely encouraged by the performance of our long haul services launched from Manchester to Washington and Chicago in the Spring of 2001. Volumes have picked up strongly over the last two months with current load factors well over 70%.

“We have had an exceptionally encouraging start up of our no-frills carrier bmibaby, which is trading well ahead of budget and which recently announced three new routes and significant expansion of its fleet. The current booking rate indicates that more than 500,000 passengers will be carried in the nine months of operation of the current financial year and 1.5 million in 2003.

“Our ability to bring wider competition to transatlantic services from Heathrow still continues to be frustrated by the restrictive Bermuda II agreement. This provides, what we think, to be an unlawful advantage to our UK competitors at Heathrow, who have the freedom deprived to bmi and others, to develop services to the USA from Heathrow. This continues to deny consumers genuine choice and lower fares.

“Trading in 2002 continues to be extremely challenging and we do not anticipate a recovery until next year. Despite the early signs of the shoots of growth and some recovery in volume, yields continue to be under pressure and we do not anticipate that this trend will change significantly for the remainder of the year. The UK aviation market continues to be one of the most competitive in the world but we remain committed to be a competitive force in a wide range of markets."

Highlights during the year included:

. the first major rebrand of the airline for nearly 20 years

. investment in long haul equipment with the delivery of three Airbus A330 - 200 aircraft

. investment in an innovative three class long haul product

. re-entry into the transatlantic market with the launch of schedule services from Manchester to Washington DC and Chicago

. application by bmi and United for anti-trust immunity from the United States Department of Transportation - this has now been approved subject to an open skies agreement between the UK and the USA

. submission of a formal complaint to the European Commission contesting the legitimacy of the Bermuda II agreement

. the announcement at the end of the year that bmi would enter the low cost market at East Midlands Airport with the launch of bmibaby

. the airline received a number of awards including Best UK Domestic Airline and short haul business airline

ends

Looks as if things are on the up :)

[Son Of Piltdown]

Put differently in the Evening Standard:-


Airlines 'under the cosh until 2003'

by Robert Lea, Evening Standard


VETERAN airline boss Sir Michael Bishop has warned aviation investors not to expect any relief from the pain in the industry until the summer of next year. Announcing a sharp fall into the red at his privately-owned BMI British Midland, Bishop said: 'Trading in 2002 continues to be extremely challenging and we do not anticipate a recovery until next year.

'Despite the early signs of shoots of growth and some recovery in volume, yields continue to be under pressure and we do not anticipate that this trend will change significantly for the remainder of the year.' He continued: 'I am being pragmatic, not downbeat, but I do not expect to see any real bounce until the summer season of 2003.'

While revenues in 2001 rose 2.4% to £756m, the number of passengers carried by BMI fell by 400,000 to 6.7m, back below the 7m mark broken through by the traditional full-service carrier for the first time in 2000. That compares unfavourably with record passenger levels at European short-haul competitors Ryanair, easyJet and Go.

The carrier, with a fleet of 57 aircraft, calculates that the 11 September terrorist attacks on the US cost the airline £35m in lost revenues - mainly through the significant drop in passengers transferring to BMI from transatlantic flights into Heathrow or from fellow airlines in the Lufthansa-led Star Alliance.

As a result BMI posted operating losses of £12m for the year. It struggled to a £12.4m profit at the pre-tax level only after the gain from the £72m sale of its ground handling business to train and bus group Go Ahead.

Exceptional losses in the year include the cost of laying off 600 staff - nearly one in eight of the workforce - in the weeks after 11 September and the cost of last summer's launch of its transatlantic service out of Manchester to Washington and Chicago.

There have been question marks over the controversially timed launch into a difficult market, but Bishop said he is sticking with the plan. 'Over the last two months we flew nearly 75% full on these services,' he said. 'We said we would go into profit on the services in three years. The last 12 months just means that we have lost a year.'

He said passenger growth this year would come from the bmibaby budget airline launched last month out of East Midlands Airport, which expects to carry 500,000 passengers by the end of the year and 1.5m in 2003.

[Kalium Chloride]

Standard has a point, you can't rely on making pretend profits by flogging assets when you're running at an operating loss. Eventually you run out of family silver. Hope Bish didn't overdo the investment.

[BRISTOLRE]

According to the latest CAA ATOL Route Registrations web page, BMi have applied for LHR-ISB,LHR-KHI and LHR-NBO.
Some much needed work for the spare A330?:rolleyes:

[Mialo]

The only reason the transatlantic routes registered 70% load factor was because bmi were giving seats away in buy one get one free sale. Practically giving away business class seats at a huge discount. if the company want to sell seats they should try marketing them effectively, just don't advertise the service on board its cr@p.

[Young Paul]

Well, for what it's worth, I've been on the transatlantic flights four times. I thought the service was fine, with some very good touches that set it apart from other transatlantic flights I've done in the past (with PanAm, Virgin, Canadian, American, BA) - which isn't to say they wouldn't match, these days. Also, they were on time on all four flights for departure and arrival - a 100% punctuality record from my experience. They also looked after my family very well. Handling at both MCT and IAD was efficient, polite and helpful.

[TopsideUp]

I have also just flown on the A330 in Biz class to IAD. Have to say I was very impressed by the service and punctuality. I hope that they can maintain the standard when the flights go full.

Bristolre do you have a link for the CAA ATOL Route Registrations web page, sounds interesting

[160to4DME]

Mialo

Please furnish your claims with evidence for us all to see.

I have done a total of 4 round trips on bmi transatlantic and have on every occassion actually paid slightly more than some competitors, all of which were definitely not discounted anymore than normal.

MAN-ORD-surface-IAD-MAN Economy 479 GBP (Expedia)
MAN-ORD-MAN Business 2249 GBP (Expedia)
MAN-IAD-MAN Economy 439 GBP (Expedia)
MAN-IAD-MAN 2559 GBP (bmi website)

No buy-one-get-one-free deals each time I've booked.

The service and cabin, frankly, knock spots off AA, DL, CO, UA, US and VS (and yes, I have travelled all of them).

But let's not bicker about who's better than who. bmi is a fine product which was launched at a very inopportune time; it is a credit to them that they have done as well as they already have.

160

[flyingfrog]

Mialo,

How many times have you flown bmi on the transatlantic routes? I guess never.

or was it more like this - brought economy tkt, asked for free upgrade, didn't get it, so let's slag them off.

[phd]

I have yet to meet anyone who has experienced the bmi transatlantic product and been anything other than fully satisfied. I have flown to IAD and back myself and found the flight and service to be top class. If only they were allowed to compete head to head with BA and Virgin from Heathrow to the USA - I think they would steal market share with lower fares and better service levels/comfort.

[fokker70]

Good result regardless, the areas that were sold were non core. They are also bright enough to realise that the baby product is where the demand lies.
As for the Transatlantic service - been twice to ORD in the last few months in 'the business' The Chef on board really is fantastic as the food arrived 'restaurant style' They need to introduce this level of service to LHR routes to really get noticed.

[dayoff]

Think you'll find that the 2 for 1 offer was on European routes only (through a Sainsburys offer) and excluded Transatlantic.

The routes have vastly picked up from what I see... even to the extent of leaving staff pax behind on occasion!!:p