BMI to be sold to IAG (BA)

[JamieLei]

Lufthansa have anounced that they plan to sell the loss-making BMI to IAG, the company that owns BA and Iberia.

http://www.bbc.co.uk/news/business-15588645

Since noone actually flies BMI (although they do fly direct to some interesting tiny markets, such as Kazakhstan, Sierra Leone and Ethiopia), the actual big story is that BMI frequent flight holders will most probably be incorporated into oneworld and BA's rubbish "Avios points" system. We all knew it wouldn't last forever...

Lucky that orudge took that round-the-world business class trip to down under recently I suppose!

Edit: more detailed info: http://www.guardian.co.uk/business/2011 ... n-atlantic

[Nawdic]

Farewell British Midland International...


Bit of a bummer really, means we may not have a contract for work!!!

[orudge]

Since noone actually flies BMI (although they do fly direct to some interesting tiny markets, such as Kazakhstan, Sierra Leone and Ethiopia)

Actually, bmi still do have a reasonably decent domestic network, although it's a shadow of its former self. It does, however, provide essential Star Alliance connections for the likes of ABZ, EDI, MAN, BHD and DUB - with most *A carriers being in Terminal 1 in Heathrow, I can just hop off my BD flight and then head straight for my connecting flight's gate. If I still wanted to fly *A but had to get a BA connection down, I'd have to change terminal, which I would very much like to avoid! Luckily up here in ABZ, Lufthansa has just started a direct ABZ - FRA service 3 times daily, which will provide some decent connections.

Otherwise, yes, bmi's network is very much a niche network to "volatile" regions, which potentially can be profitable (oil traffic), but are risky to fly to. There's been a bit of a running joke on FlyerTalk regarding the fact that any route bmi launches lately seems to get delayed or cancelled because the respective destinations then undergo revolutions! (They were meant to start flying to Tripoli in March or so, it's still not started now.)

the actual big story is that BMI frequent flight holders will most probably be incorporated into oneworld and BA's rubbish "Avios points" system. We all knew it wouldn't last forever...

Well, as you might expect, I've been looking into BA's programme, and it's not all bad these days. The redemptions are still more expensive than BD, but there's a reason Diamond Club was (and still is) the most generous frequent flyer programme in the world! (I recently flew a domestic first class segment in the US, and earned a grand total of 625% of the actual distance flown in miles, due to the 300% class of service bonus, 25% gold member bonus, and the fact that I have over 55,000 status miles resulting in effectively my miles doubling!) I am hoping I can try to book something in the next few months to clear my balance, though, as I have about 130K miles left, with which I can take the family somewhere nice in business class - with BA, I could take myself somewhere nice in business class, but not Jen or Olivia!

There's still a chance that Lufthansa may offer Diamond Club members status with their own frequent flyer programme, Miles and More. Lufthansa may not want the many DC members to be sent off to a rival alliance that easily! M&M is even worse for redemptions than BAEC, though, and for people mostly flying in discount economy like myself, so I'd rather end up with BA, I think.

Anyway, there's still a chance things might change - Virgin is (as usual) not happy about the deal, but they're not exactly in great financial shape themselves, so it seems unlikely that they will have a better offer. I guess my 'dream' solution for all of this would have been Virgin to buy bmi and join the Star Alliance, but I guess it's just lucky that bmi's staff will still be in jobs, and that miles should be safe (if devalued).

In other news, bmi Regional (based in Aberdeen) is likely to be sold to a group of business leaders up here, some of whom were involved in the original "Business Air" that were bought by bmi in the 90s. It seems they're intending to rebrand the airline and attempt to turn it into a national airline for Scotland, or similar. Good to know that they'll all still be in jobs, too - being in ABZ now, I've been flying quite a few bmi Regional planes in the past year!

Current rumours for bmibaby, bmi's low-cost airline, is that it may be sold to Monarch, but that's really just speculation at the moment.

Much more detailed information and speculation on FlyerTalk (bmi and British Airways forums) and PPrune if anybody is interested.

[61653]

In other news, bmi Regional (based in Aberdeen) is likely to be sold to a group of business leaders up here, some of whom were involved in the original "Business Air" that were bought by bmi in the 90s. It seems they're intending to rebrand the airline and attempt to turn it into a national airline for Scotland, or similar.

Air Scotia! Will Alan Cummings be part of the cabin crew, I wonder...

[Kevo00]

In other news, bmi Regional (based in Aberdeen) is likely to be sold to a group of business leaders up here, some of whom were involved in the original "Business Air" that were bought by bmi in the 90s. It seems they're intending to rebrand the airline and attempt to turn it into a national airline for Scotland, or similar.

Air Scotia! Will Alan Cummings be part of the cabin crew, I wonder...

Oh deary me![/camp]

Oddly enough, the only time I have ever flown BMI was in May 2010 to Cairo. Things have changed just a wee bit there since then...

Good little airline mind, with good food and good customer service - it'll be sad to see it subsumed into BA.

[orudge]

So, I may have just spent the majority of my miles on a first class trip to New Zealand (again), and business class back (with a brief stopover in Australia)... this time, in the southern hemisphere's summer, though! (January/February).

[orudge]

So, I may have just spent the majority of my miles on a first class trip to New Zealand (again), and business class back (with a brief stopover in Australia)... this time, in the southern hemisphere's summer, though! (January/February).

Sadly I ended up having to cancel this due to lack of money and time overall. But I thought it appropriate to bump this topic, as IAG's purchase of bmi has indeed been approved. It turns out BA are going to offer a status match to Diamond Club members, meaning I should have BA Gold until next summer, and then BA Silver until summer 2014, and BA Bronze until summer 2015. Not bad considering I've not actually stepped on a plane yet this year! Anyway, conveniently enough, we're going on a wee trip this summer on BA, so my Gold status will come in quite handy there - First lounge here we come.

Sadly, the acquisition will result in some job losses, mostly at bmi's head office. And the future of bmi Regional and bmibaby is still uncertain.

[EXTspotter]

At this stage Regional and Baby are likely to be wrapped up and closed. BA offered £172.5m for BMI alone or £20m for BMI, Regional and Baby if Lufthansa hadn't got rid of Regional and Baby before the deal was finalised. The two smaller subsiduaries have no real value as they do not own any assets and have no landing slots which are in demand, all they have is goodwill and as any purchaser in the airline field already would probably merge Baby or Regional into their own airline and lose the goodwill anyway...

[orudge]

There is still talk that this Granite Aviation may put up an offer for Regional, but there has been talk for quite some time now and nothing so far has come of it.

[EXTspotter]

If they had put a reasonable proposal to Lufthansa in the first place for regional, LH would have snapped their arm off for it, even if it was just to take Regional off of LH's hands, as it would have brought BA's payment to LH for the rest of the group up...

I am sure that if Granite had been serious in the first place a deal would have happened by now.


I think that if Baby and Regional are wound up, Flybe and Aer Lingus Regional/Aer Arran would be moving strongly into ABZ, benefiting from the loss of competition from Regional and Jet2 are likely to move into Baby's patches...

[orudge]

I think tht should sell BMI Regional to Flybe and BMI Baby to EasyJet in return for shares in those airlines

Flybe would seem like the logical people to take over BMI Regional, but apparently are not interested.

bmibaby has a rather old fleet of inefficient 737s, and its route network isn't particularly great. EasyJet would have no desire to take it on, and nor would Ryanair. Somebody like Jet2 might in theory be interested, but again, don't appear to have expressed interest.

Also, how many slots will BA gain and how many are they are selling

BA will gain 8.5% of Heathrow's total slots from bmi (I can't remember the exact actual number), but they will have to offer 14 slots to interested buyers for use on domestic (ABZ/EDI/MAN) services if interest is expressed by any airline for those slots, and they don't already have spare slots they're not using. Virgin supposedly is interested, but whether they'll put their money where their mouth is is another matter. Also, they do apparently have spare slots that are being leased out to other airlines at the moment.

Also will they stop serving routes that the Former BMI currenly serve (but BA do not) like Heathrow-Amritsar?

For the moment bmi's routes will continue as they are; things may change by the time of the winter timetable (end of October). I expect the domestic flights to be consolidated (bmi flights being cancelled and replaced by larger places on the existing BA slots, probably). Some of bmi's mid-haul destinations may remain, I guess it depends how profitable they are. BA don't have many (any?) spare planes at the moment so can't go launching new long-haul services until they receive some of their new deliveries, such as the 787 next year and the A380 soon.

Also what new destinations will BA now serve after this deal?

East Asia and South America are potentially areas BA are interested in, I understand.

[Pilot]

BMIbaby are supposedly going to sold to people in Wales, and is supposedly to become Flyforbeans.
BMIRegional are supposedly going to sold to a bunch of Scots.

[orudge]

bmibaby's fleet is not s selling point, but its flight slots at Belfast, Birmingham and East Midlands, it would be of benefit of whoever takes over the airline

Those airports aren't, as far as I know, particularly congested, so the slots aren't particularly valuable when compared with, say, LHR slots.

BMI Regional would also benefit Flybe because of its regional route network, it would also further imrpove links to BA

Perhaps, but Flybe already operates on at least some of the routes that bmi Regional operate (e.g., ABZ-MAN, EDI-MAN). As I say, Flybe would seem a logical choice to take over bmi Regional, but I guess they don't think it's worth it.

What will happen to the BMI fleet, I think the Airbus A319/A320/A321 fleet could be intgrated into the BA (because they already have a large fleet of those planes), but as for the A330s, well they might be sold and be replaced by further 787 orders

The A319/320/321s will be repainted in BA colours over the coming months and integrated into the BA fleet. The A330s are being returned to the lessors at the end of the summer timetable.

[orudge]

Potentially good news about bmi Regional

[Ameecher]

It says who Granite Aviation are, they are a group of Aberdeen based businessmen, the name is quite obvious really, Aberdeen being the Granite City and all.

[Ameecher]

No and frankly I couldn't care, perhaps you could google it and see what you could find.

[orudge]

If you do a Google search (well, if I do a Google search - I realise Google tailors results to individuals now so you may not see the same thing) for "Granite City Aviation", the first result is a FlyerTalk page about them and their bmi Regional stuff. Anyway, for what it's worth, they are guys who were involved in the original airline that was taken over by bmi and became bmi Regional.

[orudge]

It seems that they are linked to Eastern Airways (also based at Aberdeen), so could a merger be on the cards between BMI Regional and Eastern Airways?

Probably unlikely; you'd think Eastern would have expressed interest already.

Also what about BMI/BMI Regional services done on behalf of former owner Lufthansa and Brussels Airlines (also owned by Lufthansa)?

We will have to wait and see what happens.

[orudge]

http://www.bbc.co.uk/news/business-17940539

bmibaby to close later this year if a buyer isn't found (and it's looking unlikely). Good progress on a bmi Regional sale, apparently.

A great shame for all those employed by bmibaby, who look to be facing redundancy.

[JamieLei]

From a business perspective, this seems the right option. It seems that full service airlines have failed to develop profitable low cost counterparts. BA tried it in the past with BA Connect. United with TED. Some have even become full-fare airlines such as Virgin Blue.

Condolences to all the staff though. I hope they manage to get jobs in full-fare airlines - after all, they have the experience.