Branson & Bishop to tie - up airlines

[karaoke]

Can this really be true ?


British Midland and Virgin Atlantic are in advanced merger talks that would herald the biggest shake-up in the UK aviation industry for decades.

Talks have been progressing for some months, and pitch together the two longest survivors in the UK industry - Sir Michael Bishop and Sir Richard Branson.

It is believed the deal would be structured as a technical takeover of bmi but founder and chairman Bishop would be given the title of life president. Bishop, 61, owns directly 25% of bmi's shares but controls a block of 51% of the company he founded in 1978.

It is thought that Virgin is being advised in the talks by Credit Suisse First Boston and bmi is using Dresdner Kleinwort Wasserstein. Neither airline would comment. The talks come amid repeated speculation over Bishop's plans for succession.

Branson is thought to be keen to get hold of bmi's short-haul routes into Heathrow, which could become 'feeder' channels into the long-haul Virgin empire. Bmi runs a fleet of 54 aircraft on 77 routes around Europe and the UK.

As part of his lobbying for so-called 'open skies' between Heathrow and the US, Bishop launched lossmaking services from Manchester to Chicago and Washington two years ago. He reportedly ran into opposition from bmi's other shareholders, which include fellow Star Alliance members Lufthansa, the German carrier, and Scandinavian airline SAS.

In a move to shed its provincial-image, Bishop changed the name of the company from British Midland to bmi two years ago.

Then, in an attempt to fight back against the no-frills airlines like easyJet and Ryanair, he launched discount operator, bmibaby, which currently has 13 aircraft serving European routes. It is not clear whether that would be combined with Virgin Express, Branson's budget airline.

Bishop has denied speculation that he wants to float the business, preferring, like Branson, to operate in the private arena.

Last year bmi suffered its worst loss to date, swinging from a £12.4m profit to a £19.6m loss - its first time in the red for 10 years.

However, Bishop said he saw some green shoots of recovery, with people starting to book summer holidays on the main airline and on bmibaby.

Virgin Atlantic bounced back into profits of around £10m for last year, after losing £92m the previous year after the terror attacks on the US.


A COMBINED Virgin Atlantic/bmi British Midland would provide a formidable competitor to BA. One aviation expert described it as 'the perfect fit'. While bmi has valuable Heathrow slots and a strong European route network, it is hindered by high costs at a time when 'no-frills' rivals have slashed short-hop fares.

Also, it has been continually frustrated in its efforts to set up a transatlantic operation from London by the repeated failure of 'open skies' talks between the US and UK governments. In contrast, Virgin is famed for its US services but has few Heathrow slots. The two airlines would have 17% of Heathrow slots against BA's 43%.

SIR Michael Bishop has achieved the impossible in his long career in aviation, that most cut-throat of industries, writes Jonathan Prynn.

He has survived and - with the exception of the awful post-9/11 period - prospered, while retaining the respect and affection of his peers.

His airline bmi has carved out a niche in an industry dominated by one of the world's most powerful flag carriers, British Airways.


Now 61, Bishop, one of the few openly homosexual British captains of industry, was once described as 'that cute little brute' by then BA chairman Lord King.


The son of an Australian wartime serviceman, Bishop joined the industry at 21 after education at Mill Hill school in London and technical college in Manchester. The small charter airline he worked for was bought by British Midland Airways in 1964 and he soon became general manager. In 1978 Bishop raised £2.5m from a wealthy US dentist and acquired the airline.


Now very wealthy, Bishop has two houses in the Midlands and one in Sydney. During the week he lives at the Savoy - the same room for 25 years. He recently set up a charitable trust to inherit his fortune when he dies.

Gerrupta Singh.

[Goldstone]

They did talk to each other about ten years ago about a merger, but nothing came of it at the time.

Not sure how this would sit with Star.

[Clear right!]

SIA own 49%(??) of Virgin so I don't see the problem.

Best of luck to them. I wish them well :ok:

[Thunderball]

Karaoke

Would appreciate knowing the source that you're quoting from. Thanks.

[Clear right!]

This is money:

http://www.thisismoney.com/20030522/nm63276.html

[Bucking Bronco]

Bring it on! It makes sense and at the end of the day the fewer players we have out there the better we can hopefully control supply to better match demand.

[Goforfun]

Fantastic news!!

:) :)

[newswatcher]

Thisismoney is part of the UK "Daily Mail", so await the DM "knockers" to shoot this one down!

[Buster Hyman]

So, will Eddington put on the side of his aircraft;

BMI+VA,NO WAY! :E :E :E

[p.savage]

Virgin Baby?!

Just a thought!

Could be interesting, maybe they will bring Virgin International Flights to Belfast. That'd be great!

Cheers
Savage

[Raptors]

It would seem that rumours of an imminent merger could prove premature...

LONDON (Reuters) - Richard Branson's Virgin Atlantic said on Thursday it was in talks with BMI British Midland about closer cooperation but "no definitive conclusions" had been reached on any permanent tie-up between the two airlines.

BMI, which is the second-largest owner of takeoff and landing slots at London's Heathrow airport, the world's busiest international hub, said a merger was no longer being discussed between the two unlisted companies.

Well they would say that wouldn't they...I'd be interested to find out where the leak regarding the advisors came from. Speaking from the perspective of one who works in the Private Equity industry, (who used to work for Sir Michael and whose husband still does), companies don't tend to appoint advisors unless they have a definite agenda.

I suppose as always we will all have to wait and see, let's just hope that the pilots and staff at BMI don't have to face the demotion/redundancy debacle once again.

[fokker]

Hope this is true; it'd be bloody brilliant. PROVIDED no-one is made redundant again.

However, this issue went to 'final negotiation' about three years ago and fell through. SMB, when asked during a flight deck visit if the rumours were true, replied, "Dear boy, I couldn't sell my airline to a man with such apalling taste in pullovers!"

Maybe his Mum's made him a new one ..............


:cool:

[Caractacus]

I like it!

If it comes off I hope they transfer crewing and ops to Gatwick and close down muppet castle.

And of course . . .

Might we get Concorde?

Imagine waiting 30 mins for steps!

[fast cruiser]

There is a large article in the Evening standard about it as well,

I wonder where the original source came from this time.

If it is true it would be fantastic news for all of us at bmi and I hope the chaps at virgin feel the same way.

Bring it on!!!!!

cheers

fc

[PAXboy]

Hope this is true; it'd be bloody brilliant. PROVIDED no-one is made redundant again. That is the one thing that you can be sure would happen.

The areas of overlap would be:
Human Resources
Recruiting
General Aministration and Company Secretariat
I.T. and Telecommunications
Sales

Not being in the flying biz, I could not comment about Operations but chances are that some would overlap. If no routes were cut then flying and cabin crew would not be cut. However, it would probably stop recruitment for a while as they rationalised the routes and machines. But redundancies there would be.

It sounds like sense. The two have good reputations for service and do not overlap. If the two men cannot pull this together then there really will be redundancies. This merger must be BA managment's worst nightmare.

[In trim]

Totally agree....this is a very logical tie-up from the business perspective, with the short and long-haul routes complementing and feeding each other.

But there is a downside, and there would be no requirement for 2 separate HQ's. One would presumably have to shut down, and inevitably that would impact on management, admin, etc.

On a separate issue, what would happen to BMi Baby? Would that be a separate business, or would that be included in any merger? If so, would it be logical to maintain Baby and Virgin Express as two separate low-cost brands within the Virgin stable?

[PAXboy]

Regarding bmi baby and V. Express ... the clue to how they fare might rest on if Baby use the resources of the main line carrier, or if they are a full standalone company.

V.Express has been going for a goodly period of time and are established. Baby might be more vulnerable, being newer. The two almost certainly could link up but that would be much more difficult from all the admin and operational point of view. Nothing like as obvious a match as the main lines.

[fiftyfour]

Virgin tried to buy Dan Air during the last recession when it was struggling, mainly for the slots that DA had. They didn't want all the baggage that comes with taking over an ailing airline and closing down the substantial charter business. They decided to wait until receivers moved in, and then would cherry pick the bits they wanted and also hope to do well out of the slots that would become available to everyone. BA got nervous about the whole affair and quickly paid £1 to buy the whole airline as a going concern. BA (or rather BA EOG) got all the slots and successfully kept Virgin out. BA then paid off DA debts to bankers, creditors etc etc, and laid off half the staffand two thirds of the pilots. Most of the funding for this aquisition came from winding up the various DA pension funds. The surplus in the Pilots pension fund alone was £17 million. The competition issues were bypassed by ensuring that the airline was closed down quickly so that its annual revenues for that year were just £10 million pounds below the limit that triggered an automatic revue by the EU in Brussels. The case was nodded through behind closed doors by Michael Heseltine, then Trade Secretay, without an enquiry. Air UK and others were well and truly stuffed by the decision.
Clearly Virgin would probably have to wait years, if not for ever, for BM to go bust, and even then there would be no guarantee about how many slots they would get in such a case. The competition commision is unlikely to intervene. Virgin realise that buying BMI is the safest bet.
I hope Virgin want the whole of BM and not just the slots. They are two good airlines that could make a powerful force. But I doubt it means expansion. More like consolidation and cutting, because neither airline has much cash( and Virgin would have even less if they buy BM), and on top of this there are no guarantees about passenger numbers for the future.

[Max Angle]

But there is a downside, and there would be no requirement for 2 separate HQ's As far as most of the people based in London are concerned the quicker we get rid of anything to do with Donington Hall and EMA the better.

[crewrest]

The seniority list issue will be interesting to say the least, not to mention what happens if you are near the bottom of either list.

[Caractacus]

>>As far as most of the people based in London are concerned the quicker we get rid of anything to do with Donington Hall and EMA the better.<<

Couldn't agree more. A good spring clean. I could see Midland being managed by Virgin. I definately could NOT see Virgin succumbing to the culture of Donington Hall

A sound business idea and long overdue. Might be a tricky merger though due to odd synergies.

As for the senioriy list, well, that could be a real nightmare. Hope BALPA are strong.

[CarltonBrowne the FO]

According to a fax from a board member that came to the crewroom tonight, it's pure fiction. Oh well, I'm sure someone will tell us eventually- and if all else fails, if the colour of the cabin crew uniform suddenly changes that'll be a good clue! :D

[Flightrider]

You could always name the combined low-cost airline as "B Mi Virgin Baby"??

Apparently Eddington has made some rather choice comments such as suggesting that he'd rather try to buy both Virgin and bmi before letting this happen. He obviously hadn't engaged brain (i.e. thinking what the regulators would say) before opening mouth.

[Digitalis]

If this were to happen, and it's a big 'if', it would be in effect a takeover of bmi by Virgin, though it may be presented as a merger. This has been under discussion for some years, although both parties have blown hot and cold over the affair. It seems to me that bmi, whose long-haul aspirations are pretty much defunct, and Virgin, whose Heathrow expansion plans are stymied by lack of slots, have re-started negotiations in the hope that their owners' mutual dislike can be overcome in the financial interest of both companies!

The outlook for bmiBaby and Virgin Express is probably fairly neutral from this deal, as they don't compete on many (if any) routes. Virgin Express is, and always has been, nothing to do with Atlantic, and bmiBaby is going to be placed outside the bmi fold - before the deal, if it happens.

The business 'fit' for the deal has been quoted many times in the past as justification for the deal, but I'm not so sure that any airline needs to cover the gamut of possible markets - indeed, it's arguable that BA would be far better off without shorthaul. Why should it be different for VS? It's likely that non-first-class long haul will enter a period of reasonable expansion and profitability over the nest few years, but that short haul (particularly full-service scheduled - bmi's core market) will suffer at the hands of the low-cost lines. Who would buy into the bmi business in that light? Not me!

So, I don't put too much credence in these reports, but I wouldn't be surprised to hear about further codesharing and other 'synergies' in the near future.

[Caractacus]

Looking unlikely according to the Gaurdian:

The key point is that they are unable to agree a value for bmi. Read into that what you will!




BMI snubs merger approach from Virgin

Branson's hopes of creating rival to British Airways thwarted

Andrew Clark, transport correspondent
Friday May 23, 2003
The Guardian

Britain's second largest full-service airline, BMI British Midland, has rebuffed a merger approach from Virgin Atlantic which could have created a rival to British Airways with domestic, European and long-haul flights.
It emerged yesterday that the two carriers have been in talks for several months about closer co-operation - including joint ticketing, combined facilities and codesharing.

Insiders said a merger had been mooted, to create an airline called BVA. But, in a statement, BMI insisted the topic was no longer on the agenda.

Virgin's chairman Sir Richard Branson is keen to get his hands on BMI British Midland's 60,000 take-off and landing slots every season at Heathrow airport. His advisers say lack of space at the airport has been the principal barrier to Virgin expanding from merely long-haul to domestic and European flights.

A source close to Sir Richard said: "This is the most logical deal in the whole airlines industry, worldwide."

However, the two airlines were unable to agree on a valuation for BMI, which posted its worst ever loss last year of £19.6m. BMI's chairman, Sir Michael Bishop, 61, controls 51% of the airline and is effectively bankrolling its losses.

Rumours have swept the industry in recent months that Sir Michael is keen to concentrate on low-cost offshoot BmiBaby, which is on track to become profitable next year.

Sir Michael said that before he retires he would like to see BMI win permission to fly transatlantic flights from Heathrow. Experts said yesterday that a merger with Virgin would realise that ambition.

The rest of BMI's shares are held by Lufthansa and Scandinavian carrier SAS. Industry sources pointed out that the two foreign airlines are both nursing heavy losses and could be willing to sell at the right price.

Experts believe BMI's slots at Heathrow could be worth between £100m and £200m. One industry analyst said consolidation was overdue: "We've got three major full-service carriers in the UK. No other European country can boast that. It was always a fair bet that this would happen at some point."

Mergers and takeovers in the airline industry are rare because competition rules effectively ban cross-border deals. However, the prolonged downturn since September 11 has prompted a handful of deals, including EasyJet's takeover of Go and Ryanair's acquisition of Buzz.

Virgin Atlantic last month announced it expected to bounce back into the black this year, turning a £92m loss into a £10m profit, despite the effects of September 11, the war in Iraq and Sars. The airline has been expanding its network in recent years, with new services to Nigeria, Las Vegas and Tobago.

Sir Richard has ambitious plans to expand in aviation. He has started an airline in Australia, Virgin Blue, and has discussed founding a US carrier, which could be called V America. He also controls Virgin Express, a short-haul airline based in Brussels. But its efforts to expand have foundered. It recently shelved plans to open an additional hub in Paris.

[brabazon]

On paper this sounds like a very good idea, but in the past it has generally looked unlikely due to the different personality/leadership/lifestyle differences between Sir Richard and Sir Michael. Don't think you would ever have seen Sir Michael sign the Sex Pistols or Sir Richard support the D'Oyly Carte Opera Company (though someone may tell me that Sir Michael's favourite album is Never Mind the B****** and Sir Richard is often heard singing songs from HMS Pinnafore!!)

Perhaps if Sir Michael is looking to cash in his investment and move on then it may happen. In the past the airlines have code-shared, but they do serve different markets.

[Globaliser]

Shades of Pan Am and National Airlines. If they do do it, I hope it doesn't happen to them.

[stormin norman]

If Branson was so keen to Fly the flag why did he sell 49% to
SQ and The Bishop a small slice to LH ?. We worry about moving
HQs within the UK what about abroard !

[Dan Winterland]

A codeshare should have happened years ago but didn't due to the antagonism between the two chairmans ( according to some sources). It would have given BA some serious competition.

If a merger doesn't happen. a codeshare could be a sensible option. BMI would have to ditch STAR, but that isn't looking too helathy right now.

[Yak Hunt]

Just can't wait for the endless bickering on here and in 'The Log' similar to what we saw when BA swallowed a load of companies in the'70's. My mate worked for BKS and is ten ahead of me in seniority blah blah.
Seriously though, there is bound to be some pruning - does he just want the slots, or has SM leaked this to attract other suitors?

It ain't over till the fat lady sings.

[Notso Fantastic]

It ain't going to happen! There is a serious monopoly issue here. Doesn't BM have more slots at LHR than BA? What will BA start demanding as compensation IF such a merger goes ahead? If such mergers are to be allowed, why does the Woolly Pully make such a fuss of BA/AA? And paint those absurd slogans on his aeroplanes (I heard BA were chartered to paint them on). Again- it ain't gonna happen, but a good story to get people excited.

[nitefiter]

its all been strenuously denied in a statement from AR to the media and copied to all staff.

[brabazon]

Notso

Er, think you've got a misunderstanding of slots and the competition issues. BA have more slots than BD (BMI) and the competition issue re: BA/AA was over the number of routes which would become monopoly routes after a merger and the dominance of the 2 carriers on the trans-Atlantic routes. Where's the overlap between Virgin adn BMI? On paper this is a good idea and I don't think would cause a problem from competition standpoint (except in BA's eyes). But, it's a difference in culture that may block it.

[Digitalis]

Notso good on the facts, methinks! Virgin and bmi combined would have about half the LHR slots that BA possess. BA has around 40% of LHR slots, bmi about 15% and Virgin about 3%.

As there are no other airlines operating the full range of short, medium and long-haul services out of LHR, BA could be said to be in a monopoly position, and that the merger should be encouraged in order to promote competition! There are certainly no anti-trust or anti-competitive issues involved in this deal.

The problem is that Dickie and Mickey are unlikely bed-partners(!), for a number of reasons, most of which aren't likely to be overcome. I don't see this deal going any further than a bit more codesharing and possibly some sharing of booking and call-centre facilities. I'd love to be proved wrong.

I think the real reason for this story is to put pressure on Lufthansa either to increase its stake in bmi, or to allow the sale of the company on the open market.

[stormin norman]

Mr Bishop should take a long hard look at Mr Bransons
past dealings, He's left many a person high and dry.

BMI is a well run airline with a good reputation,dont lose it

I tried Virgin trains recently.NEVER AGAIN.
First class was the worst i've ever travelled ,cold food from the local indian,late dirty trains,and this from a man who said he'd improve things.

[KingoftheRoad]

In the past I flew for a company called 'Air Anglia', which became 'Air UK', which became 'KLMuk', which became 'buzz'.

All along the way each change was always vigorously denied by those 'in the know'.

In January this year it was rumoured, and first mooted on pprune, that MOL was buying 'buzz'. How we all laughed. Of course it was strenuously denied by our Dutch masters at KLM, and our own management at Stansted informed us the whole idea was ludicrous. Faxes were sent to crew rooms from a certain Floris van Pallandt (CEO klmuk) denying the 'rumour', and assuring us our jobs were safe. The media were vilified for suggesting such a thing, and city editors were rebuked in frequent press handouts.

I now work for RYANAIR , and many of my colleagues are redundant !!

I believe a certain Mr. Austin Reid (CEObmi) has just embarked on similar course of actions.


Roger Miller.

[Hand Solo]

Now if the merged airline was to join the Star alliance then what percentage of Heathrows slots would be owned by Star members?

[Goldstone]

The first thing that would happen is that a bunch of BD's LHR short-haul frequencies would be reduced and routes dropped (MME, LBA) in order to free up slots for VS to use for long-haul.

And as VS demand for long-haul slots grew, they would find them by dropping more short-haul services.

[lardy]

BMI would have to ditch STAR, but that isn't looking too helathy right now.

Not so, DanWinterland. The merged airline would remain in / join Star. SIA already own 49% VS. UA wouldn't mind - after all BA & AA manage to both be in OW (and VS flies far fewer routes).

[SKYMAN]

Stormin Norman - Get real we're talking planes not trains. Looking at what you fly I guess you fly for the main slot holder at LHR and therefore bash Virgin when ever you can. If you don't have anything on the airline, have a go at the trains...very big of you.

I doubt BMI & VS will happen be if it did, I think it would be a great airline to work for.

[Electric Sky]

Max Angle and Caractacus - I suggest you choose your comments about colleagues of your company a little more wisely. It is my view that Ops and Crewing do a thankless task. Whether you agree or not is your opinion and that is fine but it is their livelihoods. Your apparent glee at the prospect of them facing yet further redundancies and possible shutdown quite frankly appalls me. If it was your job under threat would you appreciate similar comments?

Back on the topic, it seems whenever A.R. denies something is going to happen at bmi .... it invariably happens.

ES ;)

[flange lubricator]

Stormin

We're not always late, we're not always dirty AND the food's supposed to be cold. Try any other rail opertor in the UK in future who'll charge you for the food.

[Little Blue]

Electric Sky
Hear Hear, ref yr comments about Max Angle
He has long had a chip on his shoulder about Toad Hall et al
.
It wouldn't matter whether Head Office/Ops/Crewing
was on the moon, the decision making process would remain the same.
.
Who wants to live south of Watford, anyway !
.

;)

[Anthony Carn]

Little Blue
Who wants to live south of Watford, anyway !

A great many have had a choice of either move house and home, or find a job elsewhere, imposed upon them. All at three months notice. Some have suffered relocation up to three times in their "careers". Throw-away remarks from the cosy walls of Toad Hall are not appreciated.

As for having a chip on one's shoulder regarding Toad Hall, Max Angle is in a majority, unless all of the colleagues I work with just happen to be in the minority. To state that "the decision making process would remain the same" is to demonstrate an element of the attitude which creates the chip in the first place.

If Dickie B does get his merger (which is purely about LHR slots and nothing else), then he'd do well to seek the concensus of opinion amongst the workforce about the goings on in Toad Hall.

stormin norman
BMI is a well run airline.......

If you say so. :rolleyes:

[Little Blue]

Anthony
My comments are not throwaway, and I do see both sides of the
fence, working in both the Hall and at LHR
I spend a lot of time defending my department against a lot
of ill-thought prejudice.
Do u really think that if we sat Ops/Crewing in the Queens building it would make for a smoother operation for all?
Of course it wouldn't, hence my remark over the placing of head office.
In a perfect world, there would be no disruption to yr rostas or the flying programme....
Are you operating today, by any chance?
;)

[Chalky]

Little Blue

Do u really think that if we sat Ops/Crewing in the Queens building it would make for a smoother operation for all?

Oh yes it would! For a start, putting faces to the names would improve communications and co-operation between crewing and those at the coal-face. Secondly, the office dwellers would appreciate the problems associated with operating in and out of LHR, both airside and landside.

Chalky:hmm:

[Little Blue]

What makes you think that we don't appreciate
the many ongoing problems that are encountered at LHR?
The majority of the ops staff are all from airport/dispatch backgrounds so are well-versed in that sphere
...
It's all very well shooting from the hip and laying
all the blame at the door of Crewing/Ops..
Have you taken the trouble to see life from the
other end of the phone?
.
Office dwellers, indeed. !!
.
Oh, and I am in LHR at the moment..and I'm
pretty sure that you know my face !!
..
Don't want to start a slanging match cos we really
are all batting for the same side, aren't we?
;)

[Zeus]

Do you really think that if we sat Ops/Crewing in the Queens building it would make for a smoother operation for all?

Used to work for a company where Ops had a window on to the ramp. Amazing how much better things ran!

:ooh:

[Chalky]

Little Blue

My, we are touchy, aren't we!

The majority of the ops staff are all from airport/dispatch backgrounds so are well-versed in that sphere
Note that I referred to Crewing, not Ops.

It's all very well shooting from the hip and laying all the blame at the door of Crewing/Ops..
I wasn't BLAMING anyone, was I?

Some years ago now - when we were in the Crewroom upstairs in the Q's Building - Crewing rang Crew Dispatch to speak to a Captain. "Sorry", said M in Dispatch, "he left a few minutes ago; he'll be in the Car Park by now." "Oh", said Crewing person, "could you stick your head out of the door and give him a call for me?"!!!

Chalky

[flappless]

Do u really think that if we sat Ops/Crewing in the Queens building it would make for a smoother operation for all?

Actually Little Blue, yes ! bmi mainline is no longer based in the EMA. I can't think of anything better than the people who write our rosters being challenged, in person, by the people who work them. It is long overdue. Face to face is far better than hundreds of miles away at the end of a phone line ! I say move crewing, operations and all other parts of the bmi operation to LHR as soon as possible !

[MaximumPete]

flapless and BB

Speaking from personal experiences over a long period of time I can confidently say that, even with taped phone call evidence, that "mistakes" have never ever been the crewing department's fault. Nobody has ever said "We got it wrong, sorry"

One particular "gentleman" springs to mind whose Daddy was something high up in the airline, I forget what as I really can't be bothered.

Life's too short.

MP
:yuk:

[bmibaby.com]

OK, here's just an armchair CEOs opinion of the operational possibilities of the new link-up;

1. Merge bmi mainline with virgin express. the name virgin express would be good for the new airline. when vex was launched in bru, people expected the same level of service you get from virgin atlantic, but were disappointed with no-frills. adding the virgin name to the brand but adding express, gives virgin respectability but with a local, shorthaul feel, rather than virgin atlantic plastered over an A320 on a LHR-EDI flight.

2. Use the onboard service that was provided to passengers when Virgin operated the LHR/LGW-ATH route.

3. Order a modern fleet of Airbus airliners to replace the motley fleet bmi and bmibaby currently operate.

4. Operate routes from LHR anf MAN (maybe LGW as well but youd have to watch out for EZY) a route network of routes in competition with both the no-frills-airlines (i.e. Spain, Germany, Italy) and BA (Russia, Greece etc.)

5. Keep bmibaby. By restructuring it with the Virgin brand and expanding it across Europe in the same way he has done with Virgin Blue it could be a real hit. And Virgin Baby doesnt sound SO bad!

I dont know what coiuld happen to regional though?

[TwinAisle]

As a baby fan (they have done more for my local airport and the local flying people round here in ten months than the rest of the crowd have done in 50 years) - my two penn'eth....

Love the idea of VEX merging with mainline.... I guess tho that you'd have to rebrand, since remembering my time in Brussels, VEX stock is not very high - mainly for the reasons bmibaby.com states, but also because of the codeshare - people paid full whack for SN flights, ended up on VEX. Not happy campers.

In-flight service? Keep bmi's. Works for me. For the majority of the flights, there is not really the time to serve cordon bleu anyway. I'd rather a decent meal when I land using the money I saved on the ticket....

Airbuses for baby? I can't see that happening. The current baby fleet is consistent, fairly modern, and does the job. It is going to be interesting how well eJ get on with the hybrid 319s (319.5s?) they are getting....

Personally, I'd like to see baby go it alone. My experiences of them so far have been nothing other than very positive, which gives it many more points on the TA scale of approval than VEX, eJ, Go, flyBE, 6G or - god forbid - Ryanair...baby would be advised to stay away from the big hubs. Keep to airports where there is little if any competition. Provide the sort of service they do at CWL and they won't go far adrift. BUT - can we have more services please? Can't get a flight to the med this summer for love nor money - full all the damn time!

TA

[bmibaby.com]

bmibaby cuold be kept and possibly rebranded as virginbaby or something along those lines.

the idea would be that bmibaby could replace bmi mainline from their focus cities like EMA, MME and the scottish airports where virgin do not currently fly, as bmi would probably just be turned into a feeder carrier for virgin's longhaul flights from london and manchester.

by adding some service ideas from virgin's virgin blue and possibly being able to earn and spend points with virgin's frequent flyer program, business passengers would still use bmibaby, where they may have used bmi mainline in the past.

so by replacing bmi in those cities, a large and common fleet would probably have to be used, so maybe Airbus as would probably be the type with the mainline fleet or maybe the 737NG as these are currently operated by Virgin's other airline virgin blue.

similarly a merger between bmi and virgin express, lets say for now its called virgin express, because that carrier is liked by low-cost passengers for being one of the most professional of the low-fare airlines, would allow virgin to create big feeder hubs at lhr and man aswell as being able to do very well from the bru hub where there is a lot of room for expansion. maybe that is where the 4 A330s could go?

just some more ideas!

[TwinAisle]

Got to disagree with bmibaby.com.....

I would hate to see baby join up with VEX. In my experience of both, baby wins hands down. I don't think VEX actually is regarded as "one of the more professional low costs"; VEX seems to be trying just to be cheap - a sort of Belgian Ryanair, without the lousy customer service.... baby seem to be aiming higher than that.

It makes more sense for mainline to become a Virgin brand. Call them Virgin X, where I don't know what X is, but certainly not Express, Atlantic or baby!

Let baby rename - can't see them being bmibaby without bmi.... let them stand alone, and carry on doing what they do best. They are doing a great job of growing by staying away from the competition, providing a fine service to underserved parts of the country, and by not getting involved in the Ryanair v easyJet mud-slinging (both of these may do better to concentrate on the "my yields better than yours" debate, rather than who has the lower fares, imho....)

Viva baby libre!!

TA

[bmibaby.com]

Everyone is entitled to their own opinion.

I don't know what the new airline would be called, but the new airline that was formely bmi, for argument's sake we'll call it Virgin Express, would be the feeder airline for Virgin Atlantic at London Heathrow and Manchester. The new airline would have good service, good fares and a modern fleet of A320 family aircraft feeding the longhaul flights, but also being competitive for the point - to - point traveler using LHR and MAN.

bmibaby (maybe virginbaby) could pick up all the markets that bmi now virgin express, has dropped to concentrate on the hub market. So you could see baby at GLA, EDI, ABZ as well as the existing bases at former bmi airports EMA and MME plus of course Cardiff. The airline is quite respectable in the low-cost sector so why not keep the airline and fill up the gaps, thus easing the intergration process?

[TwinAisle]

Hey bmibaby.com - that sounds conspicuously like concensus to me!! Here's to baby growing into the spaces vacated by "New" mainline - long may they prosper.

The only thing I don't want to see is baby and VEX merging - baby are just better than VEX imho.... as I said, viva baby libre!

TA

[Caractacus]

Latest from the Observer:

http://www.guardian.co.uk/airlines/story/0,1371,967904,00.html

[Dispatcher]

My view !!

1/ bmi mainline is split from the rest of the 'bmi group' and Sir Michaels control - this is then merged under the name 'Virgin' (not British, not UK and not Atlantic)

2/ bmi baby and regional is kept by Sir Michael and run with lot's of money he makes from the sale of bmi mainline - baby should be massive in a year or so, he has the north and middle England as his playground !! Keep your airline playthings and retire happily in ten years or so

3/ Virgin takes control of the entire mainline bmi network and forges it together under the Star Alliance umbrella as a serious comptetitor to BA

Virgin will now have a major presence in Europe feeding traffic to London and Manchester for existing Virgin longhaul.

The A330's will stay for medium-long haul ops such as DXB that both airlines have been looking at for some time.

Staff wise there should be little loss on the front line, however I would say once ops, crewing, sales,marketing,training etc have been merged after 12months or so, small losses are possible. The major expansion that would come about in the 12-18month period post takeover will hopefully see most keeping jobs tho.

4/ BA will fight this move tooth and nail !! It will be great for the UK aviation market and for employees of both airlines I think - but for BA in the weak state it is now - could be tough times ahead and they know it !



In short, a big battle ahead to push it through, but lots of exciting possibilities ahead - good luck Dickie......come and get it!

[ducksoup]

There are obviously an awful lot of experts out there in branding, sales and marketing.

Well, here´s another point of view.

Why not take the opportunity of scrapping that offensive, neo-sixties, smart-arsed, "Oops, I-tried-not-too-shock-you-really-I-did" moniker, dreamed up by a shameless publicity seeker, with lazy dress habits and replace it with with a proper, respectable image not unlike the late-lamented BMA and the proper colour scheme it wore. It took years to get to that position and the process was well underway 20 years ago, when Branson´s airline was born.

Nah, it will not happen, simply because Sir Michael and the Wooly Pully are just so far apart intelectually and will always remain so. Shame really, because a properly constructed MERGER, not take over would seem to make a lot of sense on initial inspection.

Let us hope that both companies make it through this particular downturn and continue thier seperate development although I realise that that is probably a pious hope in 2003!

[Caractacus]

Latest position from the Bishop in the FT:

BMI keeping to the independent path
By Kevin Done in London
Published: June 8 2003 21:57 | Last Updated: June 8 2003 21:57


Having controlled the fortunes of BMI British Midland for 25 years Sir Michael Bishop is in no hurry to step aside in spite of the rush of recent speculation that he was about to merge BMI with Sir Richard Branson's Virgin Atlantic.


At 61, he says he is the same age as Lord King was when he first became chairman of British Airways.

Last week, Sir Michael wrote to employees of BMI and said: "I have no plans to retire." He said there was no truth that "advanced merger talks" had taken place with Virgin Atlantic and "neither are there any ongoing negotiations."

He told the Financial Times he had no plans to withdraw from his position as executive chairman of BMI and controlling shareholder. He planned to remain at the helm at least for the duration of BMI's present European joint venture agreement with its minority shareholders Lufthansa and SAS Scandinavian Airlines, which runs to 2007.

Financial details on the recent performance and future outlook for BMI and Virgin were exchanged a couple of weeks ago, but only served to emphasise their differing views of the airlines' respective prospects.

There has been no detailed due diligence work, and the investment bank advisers, Dresdner Kleinwort Wasserstein and Gleacher Shacklock for BMI, and Credit Suisse First Boston for Virgin Atlantic have been called off the case.

Whether that is the final word remains to be seen.

The crucial issues still obstructing a deal, remain valuation and, in particular, corporate governance, namely a structure that can satisfy demands for transparency and influence of all five present shareholders.

BMI is owned 50 per cent plus one share by BBW Partnership (Sir Michael's control vehicle), 30 per cent minus one share by Germany's Lufthansa and 20 per cent by SAS Scandinavian Airlines. Virgin Atlantic is owned 51 per cent by Sir Richard and 49 per cent by Singapore Airlines.

Sir Michael says he accepts that a merger could be "perfectly logical."

BMI has the second largest pool of take off and landing slots at highly congested London Heathrow, the world's busiest international airport, with a share of 13 per cent after British Airways' total of about 40 per cent. Virgin holds less than 3 per cent.

The Branson airline, exclusively a long-haul carrier, crucially holds lucrative traffic rights, however, for transatlantic services between Heathrow and the US. Sir Michael's BMI does not.

Sir Michael has campaigned for several years to break into the transatlantic market but hitherto has been blocked by the severely restrictive nature of the bilateral air services treaty between the UK and the US, which only allows two UK airlines, BA and Virgin Atlantic, and two US airlines, on the routes.

Virgin has found its own growth severely restricted by its shortage of Heathrow slots, and it has also suffered from not having access to the feeder traffic of a short-haul network in Europe. Sir Michael has the network.

Whatever the compelling business logic, it remains to be seen, whether the pair, two of Europe's leading aviation entrepreneurs, will return to the negotiating table.

There remain the deep differences on substance to overcome, as well as of style and personality, pitting the innate caution and conservatism of Sir Michael against the flamboyance and showbusiness flair of Sir Richard.

For his part Sir Michael insists he has a stand-alone recovery plan, Project Blue Sky, that can return BMI to sustainable profit by 2005 under its own steam.

BMI is the Star alliance's entry ticket at Heathrow against BA and its Oneworld grouping, and Star, led by Lufthansa, will not give up control of that trump card lightly.

[PAXboy]

Sir Michael thinks that everything will continue until 2007? I wish him good luck. Experience of living in the world tells me that something will get in the way of the smooth path.

What that something might be - I have no means of knowing but I can see that the rate/cycle of change continues to speed up. Ever more unpredictable events occur and BD will not be able to continue on it's current, independent, path. It does not make me happy to say that - just the way that I see the world changing around me, every day.

[MarkD]

the logic of it seems to depend on how fast the EU-US open skies progresses. If it takes ages then VS is OK because bmi will get more and more desperate but if it's concluded quickly bmi will have little/no need of VS but can roll out its own services using its existing slots.

Thing is - with UA and AC already operating, and US joining Star, are there routes North America-UK not currently served by a Star airline?

[VIKING9]

If it ever happened, would it be called "BMi Virgin" ?? (be my virgin)

[ducksoup]

Simply hilarious, VIKING9!