Branson & Bishop to tie - up airlines
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Branson & Bishop to tie - up airlines
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.
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.
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That would be the Daily Mail then!
Thisismoney is part of the UK "Daily Mail", so await the DM "knockers" to shoot this one down!
Last edited by newswatcher; 22nd May 2003 at 20:15.
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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.
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.
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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 ..............
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 ..............
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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!
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!
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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
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
Paxing All Over The World
Hope this is true; it'd be bloody brilliant. PROVIDED no-one is made redundant again.
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.
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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?
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?
Paxing All Over The World
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.
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.
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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.
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.
But there is a downside, and there would be no requirement for 2 separate HQ's