BD Low Cost ex EMA!

[justinzider]

How about this that was sent to bmi employees!

Q&A sheet

Internal questions

1. Will there be dedicated employees assigned to the no frills operation?

Yes, at this stage only flight deck and cabin crew will be dedicated to the new airline.

2. Will this be a separate company?

Initially the company will operate within the bmi framework, but in the medium term we would expect it to be established as a separate entity.

3. If I volunteer to work for the no frills operation, will my pay, terms and conditions of employment change. Will the same union agreements apply?

In order to compete effectively in the niche market of no frills operators, we need all dedicated employees to be on terms and conditions that reflect the different nature of the business, which will reward productivity. We expect to recognise the current unions.

4. Will I be able to transfer back if I want to at a later date?

It will be possible to apply for a job at bmi british midland, subject to availability and the different terms and conditions.

5. What staff travel benefits will be available?

Current bmi staff will be able to use their standby and annual firm concessions on the no frills airline, subject to availability as always. At this stage, the friends and family scheme will not apply to the no frills routes, as the fares available will be very competitive. The no frills employees will have their own staff travel scheme for their own dedicated services.

6. Who will be running the new no frills airline - will there be a new management board?

The airline will not be operated under a separate management structure, but will be marketed as a stand alone product with its own name and brand.

7. When will we know what the airline is going to look like?

Further details will be announced next week.

External questions

8. Which destinations will the new airline operate to?

Initial destinations will include a high frequency of flights from East Midlands to Nice, Palma, Malaga, Barcelona, Alicante and Faro.

9. When will the new schedules start?

The no frills airline will start operating on 23 March 2002, the weekend before Easter.

10. When will it be possible to book tickets?

Later this month, with the date to be announced next week.

11. How can passengers book tickets?

Tickets can be booked on the website at a discount, or via reservations. Travel agents will also be able to make bookings through a dedicated internet facility.

12. How can I register for further information?

You will be able to register for further information on the no frills airline, by visiting the web site <a href="http://www.flybmi.com" target="_blank">www.flybmi.com</a>

13. What type of aircraft will be operating the new services?

Boeing 737-300 aircraft will be used to operate the no frills schedule, with a 148 seat configuration.

14. How many aircraft will be in the fleet?

Initially two aircraft will be dedicated to the no frills airline.

15. What will the seat pitch be?

The seat pitch will be up to 29-30 inches.

16. What service will be provided inflight?

The no frills airline will be operating a no frills service, with quality catering on board, available for purchase.

17. Will members of bmi’s frequent flyer programme, diamond club, be able to earn points on the new airline?

diamond club members will not be able to earn points when travelling on the new carrier, but they will be able to redeem points they have earned by travelling with bmi british midland.

18. What will the fares be?

The pricing structure will be extremely competitive with the ability to book low cost, one way or return fares - the actual fare levels will be announced next week, but internet fares will start from £25 each way including all taxes and charges.

19. Will there be a charge for tickets booked on credit cards?

As is customary with no frills airlines, tickets booked using a debit card will not incur additional charges, but credit card bookings will incur a surcharge.

20. What impact will this have on the development of bmi regional? Will other routes be transferred across to the no frills business? Where are the boundaries between bmi regional and the no frills airline?

The initial route network for the no frills airline, focuses on leisure routes to the Mediterranean. However, further route development may take place from the existing portfolio of bmi regional or by the addition of completely new destinations. This will be driven by customer demand.

21. In November, Austin Reid said that bmi was not going to become a low cost operator but should adopt some low cost principles. Why the change of mind so quickly?

bmi british midland is not becoming a no frills airline. In order to compete across all market segments in the industry, bmi is launching a separate no frills carrier, offering bargain fares for point to point travel.

22. Is this the beginning of an overall transition to no frills?

No. This is the launch of a separate no frills airline to be based at East Midlands Airport. bmi british midland’s Heathrow hub is clearly not suited to a low cost business model and as such, bmi is committed to its development of business routes within Europe and the USA, as well as being wholly committed to its membership of Star Alliance.

23. Will the new airline have a codeshare/interline strategy?

No.

24. Will this mean more jobs being created? Are any further redundancies planned?

In the first instance, resourcing will come from the existing bmi british midland workforce. However, the overall management structure of bmi british midland is continually being reviewed to ensure that our overhead costs are kept under control in these challenging trading conditions.

25. What is bmi’s strategy for its overall business? We now have shorthaul full service, shorthaul regional, shorthaul no frills and longhaul. Isn’t this a confusing proposition for the customer?

bmi british midland has launched a no frills airline to meet the customer demands of a niche market. The current business model will still be maintained where there is demand for a full service airline, which offers connecting and interline opportunities.

26. How does this impact on bmi’s Star Alliance relationship?

It doesn’t. bmi british midland is still a full member of Star Alliance.

27. Have you come to an agreement on airport charges with East Midlands Airport?

bmi has come to an agreement with East Midlands Airport, which allows us to launch this new airline.

28. Why have you applied for a licence to operate East Midlands to Prague, when you objected to Go’s application?

The reason for our objection to the application by GO is to seek clarification from the UK Department of Transport, Local Government and the Regions (DTLR) regarding the availability of future capacity on all routes between the UK and the Czech Republic including services from East Midlands Airport to Prague. bmi has applied for its own route licence in order to ensure that the airline has the opportunity to operate this route, should the bilateral agreement be re-negotiated.

29. Isn’t this just a pr stunt to prevent Go from competing in your own backyard?

No. bmi british midland is realising a long held ambition to launch a no frills airline in the Midlands. We believe there exists a market demand and an opportunity to commence a no frills business from East Midlands Airport. This has been facilitated by the new owners of the airport who have now demonstrated their willingness to develop it further. bmi has been a major operator and employer at East Midlands Airport for over 35 years and wants to continue its development in the region.

Hmmmm....

[brain fade]

I dont get this. If you want a 'no frills' airline in other words you want a low cost base so that you can sell the tickets for less without going bust, then why not just reduce the 'cost base' bit and then sell the tickets for a bit less money, capitalising as you go on your proper, full service, brand?
How can BM do this 'no frills' stuff when by definition they remain a 'full service' airline, with all the attendant overheads still in place?
Suggestion! Instead of puting the workers on poorer terms and conditions to save a few bob, why not sack a steady 75% of the management! believe me, nobody would even notice. (probably good advice for Big Airways also).
Still, never yet seen a turkey vote for christmas!

[682ft AMSL]

There is an intesting sub-plot developing here, surrounding the sudden interest in low-cost ops by the owners of EMA - Manchester Airport.

Could it be that one factor behind the recent developments is that a successful low-cost hub at EMA would potentially hinder a similar development at Finningley. Manchester Airport take c.25% of their punters from Yorkshire and are known to be nervous about the prospect of competition.

Representitives from MAPLC were certainly quick to point out the implications for Finningley of their actions, during the public enquiry last week.

[Algy]

Hi Electric Sky,

happy to be corrected - I asked them "what's been grounded" they said buses and 737s. Hard to know who else to ask! So what are the rest of the 'eight' then?

[Electric Sky]

Algy

Only Airbuses have been parked ... not sure how many A321's at EMA but I think it is 6 ... with one kept active for charter work. Also, 1 A330 sits at MAN after being returned early from its lease to SAS.
No 737's have ever been parked though.

Wasn't criticising, just correcting ... hope this helps.

ES <img src="wink.gif" border="0">

[Vee2]

[quote]1. Will there be dedicated employees assigned to the no frills operation?

Yes, at this stage only flight deck and cabin crew will be dedicated to the new airline. <hr></blockquote>

If lowering the cost base is an issue in the success of the venture simply having dedicated flight crews hardly seems to be the answer!

[quote]2. Will this be a separate company?

Initially the company will operate within the bmi framework, but in the medium term we would expect it to be established as a separate entity.<hr></blockquote>

This will also give the opportunity to ditch it in the shorter term if GO proves to be more efficient and popular.

[quote]3. If I volunteer to work for the no frills operation, will my pay, terms and conditions of employment change. Will the same union agreements apply?

In order to compete effectively in the niche market of no frills operators, we need all dedicated employees to be on terms and conditions that reflect the different nature of the business, which will reward productivity. We expect to recognise the current unions..<hr></blockquote>

Is this a back door way of cutting all the salaries and reducing the terms and conditions protection of established union agreements ?

[quote]4. Will I be able to transfer back if I want to at a later date?

It will be possible to apply for a job at bmi british midland, subject to availability and the different terms and conditions. .<hr></blockquote>

Who is going to volunteer to take a salary cut, and no way back if the whole thing is closed down in 6 months?

Surely it would be sensible to offer the jobs to those who were made, or are likely to be made redundant. However, the entire opertaion would need to be "restructured" and ground staff, managers etc all put on different salaries and Ts & Cs to improve productivity. Hope it works but there do seem to be several potential stumbling blocks.

[nitefiter]

I think the two 737,s to be used are the two ex Brit World aircraft that are parked at EMA.

[Anne.Nonymous]

Sorry nitefiter

Not often right but wrong again. The aircraft are GOJTW and GECAS


Anne

[ 15 January 2002: Message edited by: Anne.Nonymous ]</p>

[speed check]

Easyjet and ryanair go on about everybody else being high cost. Maybe, but then there are some people who like to travel in a nice seat,eat nice food and get to the airport near the city.I hope BMI does well and good luck to all looking for a job.

[Vref +50]

Speed check: [q]there are some people who like to travel in a nice seat,eat nice food and get to the airport near the city[/q]

Given that this thread is about Go and Baby BMI - the seat pitch will be the same in the same type aircraft with similar standards of food for sale on board whilst flying exactly the same routes.

What you appear to be referring to is that some people like to pay £600 to fly to Nice on a full frills airline. I contend that nearly everyone prefers to fly to Nice for a sixth of that cost. Which is the quite staggering differential you will find if you look at historic BMI and Go/easyJet fares.

Sir Michael Bishop is scared stiff about a proper Low Cost airline moving into his HQ and putting his company out of business. BMI's long haul is lossing money, Regional is marginally profitable and the only routes making money are UK domestics and the summer Foker routes. Go would clearly anhilate the domestic EMA routes offering - as they do already from EDI GLA BRS - £35 rtn fares.

Their summer load factors to the Med speak for themselves and you frequently cannot get on their flights in mid summer with less than a fortnight to go. Same goes for easy and Ryan...

Sir Michael is engaging in spoiling tactics. Which is regretable. <img src="frown.gif" border="0"> All the more so when one considers his chances with an airline no one has heard of compared to one that is currently plastered all over the Midlands...

The big boys are running scared. easyJet will kill BA Euro Gatwick stone dead within 2 years. I bet Go do the same to BMI's EMA operation. Fortress Heathrow will surely follow, but, perhaps not in my lifetime.

VREF.

[flappless]

Vref+50
Well done ! You are the first to spot the fact that this has nothing to do with bmi in any way wanting to run a low cost airline. They can't even run a mainline or regional outfit. The ONLY reason that bmi have started this is to MAKE GO withdraw from EMA ( and BTW they will manage this - it is just a matter of time ). That is possibly the point on which we do not agree !!!!!

[ 15 January 2002: Message edited by: flappless ]</p>

[Electric Sky]

I reiterate that i hope both airlines succeed at EMA. One of my best friends has his mortgage paid for by Go and I have mine paid for by bmi .... are there some of us that really wish a rival airline to fail?

Sorry to be so forthright but some of the last posts here astound me!!

ES <img src="wink.gif" border="0">

[nitefiter]

Anne.Nonymous
Ouch, that really hurts!!

[Amazon man]

I am afraid Electric Sky that the aviation business like so many other areas of life in the UK now has its established yob element who seem to take great delight in doing others down and sticking in the boot when your on the floor .

Most of the gentlemen in this business are long gone and thankful to be out of it.

[Anne.Nonymous]

Sorry nitefiter - cruel to be kind! <img src="smile.gif" border="0">

Like Electric Sky, I too am astounded by the recent replies. Those within bmi who are, or may be, affected by this initiative will have access to the BM_Allpilots list where senior management have openly (to my mind) answered the questions of BM pilots, i.e. which pilots and cabin crew, which AOC /aircraft etc. What appears here is mainlyill-informed speculation from those who have little or nothing to do with the airlines involved. (Check the profiles of some contributors!)

Like most successful businesses bmi had already conducted a feasibility study for the future; the low fare airline had already been looked at but the arrival of Go on the doorstep precipitated the decision to start. bmi has always relished competition and took BA head on out of DUB/BFS/EDI/GLA. BA no longer fly LHR - DUB and LHR - BFS and I understand are reviewing their other shorthaul routes.

There will always be those who wish to fly from a major airport to a major airport in comfort and willing to pay for it; likewise there will always be those looking for the best they can afford. The trick is to cover the widest spectrum of the market so that you don't put all your eggs in the one basket; it also ensures that you will be here when the pendulum swings back again. bmi have done this with the long haul, full service, charter, regional and now the low fare; meantime Go have concentrated purely on the low fare.

Good luck to both airlines and to those who work for them. I hope they enjoy working out of EMA as much as I did when I was based there.

Anne

[Copenhagen]

But this is an anti competitive move.

BMI have fought off any competition at EMA, in recent history, KLM in Amsterdam, and CityJet in Dublin.

This was done by increasing capacity, switching to Jets, lowering fares, etc.

BMI, and their owners SAS (my airline) and LH have a history of anti competitive behaviour. Just look at SAS in Copenhagen (with Maersk), SAS against Virgin express, LH against GO and Ryanair.

SAS tried the same thing recently against GO and FR in Stansted. I enojoyed the cambridge nightstops, pity we were carrying no passengers! The company must have lost a fortune here! I think that the same thing will happen with BMI.

It the GO case, BMI flew a full service A321 on STN MUC just to kick GO off the route. Fares, min stay, frequencies and schedules virtually the same.

BMI should focus on their loss making European operations ex heathrow, and finding a home for their underused A330 fleet at Manchester. NOT trying to enter yet another market segment that they have no history in. There is no room for two low cost carriers in East Midlands. Thats BMI's plan.

And I cannot believe that pilots just sacked by BMI will come back to BMI on a lower salary, and worse conditions! You would lose your redundancy payments, have to move home, and get paid less, just to be shafted two years down the line when BMI realise that they are spending too much money on this! Just like SAS did in Stansted.

[Ringwayman]

Copenhagen

The underused A330 fleet at Manchester? They operate daily flights to Chicago and a 6 weekly service to Washington with the 3rd in storage/used as back-up.

Ringwayman

[Max Angle]

Copenhagen,

I think it's called competition, you are quite right in saying that BMI would like only one low cost carrier at EMA and we would like it to be us instead of GO!. It would be pretty strange if they thought otherwise. I know it's a fine line between competition and anit-competitive practice but it's a hard old world out there and I am sure that GO are big enough to look out for themselves.
Just to correct your point about the A321 at Stansted, it was not a BMI operation but a full wet lease to LH with LH flight numbers and LH catering etc. Apart from 3 rows (12 seats) of full service biz, which nobody ever booked in, it was just tea and biscuit service.

[ 16 January 2002: Message edited by: Max Angle ]</p>

[Copenhagen]

Ringwayman
Underused = 33% of fleet idle all day every day.

Underused = 3 aircraft operating 26 weekly operations to US east coast destinations

Max Angle

I'm afraid that BMi will be the loosers. GO are profitable, I doubt BMi are. Go will have low cost and low yields, Bmi lite will have higer costs and low yields.

[Airbus215]

MMMMM


HATE TO DO THIS TO YOU COPENHAGEN ....

THE 3RD A330 AT MANCHESTER IS THE UNIT THAT TILL 11 SEP WAS OPERATING FOR SAS (YOUR AIRLINE !)TO NEW YORK !
THIS WAS LEASED TO SAS UNTIL SPRING THIS YEAR BUT RETURNED EARLY !

ITS CURRENTLY BEING USED AS FLEET BACKUP/TRAINING AND WONT BE PARKED UP FOR TOO MUCH LONGER .

<img src="smile.gif" border="0">

[ 16 January 2002: Message edited by: Airbus215 ]</p>