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Lufthansa Has Resolved To Buy BMI Majority Stake  
User currently offlineVS11 From United States of America, joined Jul 2001, 1109 posts, RR: 0
Posted (6 years 3 months 3 weeks 4 days 8 hours ago) and read 5909 times:

According to this:

http://news.airwise.com/story/view/1209506525.html

Quoting part of the article:
"Mayrhuber also confirmed that the airline had resolved to exercise its option to buy the majority of UK airline bmi in two stages in the next two years. The timing and price had already been agreed with bmi majority owner Michael Bishop and the money had been set aside for the transaction"

Since some of us speculated on that option, I thought it would be interesting to post the news.

34 replies: All unread, showing first 25:
 
User currently offlineGlobeEx From Germany, joined Aug 2007, 742 posts, RR: 5
Reply 1, posted (6 years 3 months 3 weeks 4 days 8 hours ago) and read 5903 times:

I think this are great news. I believe we have some interesting times ahead at LHR. I strongly believe that LH will be able to turn BMI into a great carrier which will give BA some headache. Unlike BA LH has proven its ability to run a "foreign" airline profitable. Let the speculation over future l/h destinations from LHR begin. JFK, BOS, ORD? This will make LH as the holding company of BMI by far the second biggest airline at LHR (aren't they already or is VS a little bigger?). So howmuch of the Slots will LH have then at LHR? close to 25%? BA does have something 40%ish, right? LHR might finally become a proper hub for Star.

GlobeEx



As you may presently yourself be fully made aware of, my grammar sucks.
User currently offlineVS11 From United States of America, joined Jul 2001, 1109 posts, RR: 0
Reply 2, posted (6 years 3 months 3 weeks 4 days 8 hours ago) and read 5857 times:

I was very skeptical about BMI developing itself as a major LHR long-haul carrier. Now with LH running the show it is more plausible but there are still some challenges:

1. They will have to start using their slots from short-haul flights for long-haul thus either diminishing frequencies or destinations, which will hurt their short-haul network

2. Any new long-haul flights from LHR would have to compete with the existing competition, which you have to admit is pretty well-established especially in the more lucrative markets.

2b. Alternatively, they could start developing new routes but they would have to be business-oriented to make use of LHR but new routes are expensive and hard to find new business routes out of LHR.

3. As almost all new routes for BMI would be losing money in the beginning, even with the deeper LH pockets, it will be a very slow process to expand profitably as I doubt they would be able to subsidize many unprofitable routes at the same time.

4. New aircraft. I could be wrong but aren't A330 slots taken up for a few years?


User currently offlineBOStonsox From United States of America, joined Dec 2007, 1989 posts, RR: 0
Reply 3, posted (6 years 3 months 3 weeks 4 days 7 hours ago) and read 5772 times:

Maybe they could launch some TATL flights out of MAN as well? BA dropped their MAN-JFK flight and I'm sure that BMI could connect a lot of people through there. Aren't the LHR slots going to be relaxed in the future when T5 is fully operational? Anyway, I think that BOS, JFK, and ORD would work, with LAS and MCO being possibilities as well. They should fly to BOS from MAN since nobody does right now and there are suitable connections on both ends.


2013 World Series Champions!
User currently offlineCloudyapple From Hong Kong, joined Jul 2005, 2454 posts, RR: 10
Reply 4, posted (6 years 3 months 3 weeks 4 days 3 hours ago) and read 5675 times:



Quoting BOStonsox (Reply 3):
Aren't the LHR slots going to be relaxed in the future when T5 is fully operational?

T5 adds exactly ZERO slots to the runways.



A310/A319/20/21/A332/3/A343/6/A388/B732/5/7/8/B742/S/4/B752/B763/B772/3/W/E145/J41/MD11/83/90
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 5, posted (6 years 3 months 3 weeks 4 days 3 hours ago) and read 5651 times:



Quoting BOStonsox (Reply 3):
I think that BOS, JFK, and ORD would work,

No chance on JFK and ORD...extremely competitive routes and fully established. BOS might have a small chance since there really isn't any StarAlliance members flying the route.

Quoting BOStonsox (Reply 3):
LAS and MCO being possibilities as well.

Lower-yielding routes such as LAS? Not so sure.. scratchchin ...



"Up the Irons!"
User currently offlineTullamarine From Australia, joined Aug 1999, 1550 posts, RR: 0
Reply 6, posted (6 years 3 months 3 weeks 4 days 2 hours ago) and read 5536 times:

The strengthening of BMI is a real concern for VS. It probably makes them the most exposed of the major LHR based carriers as they now lack a strong domestic/regional base and also do not have a protective big brother. Technically SQ could be VS's big brother but you get the impression that the relationship between the two is pretty sour and has been for a number of years.


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User currently offlineGlobeEx From Germany, joined Aug 2007, 742 posts, RR: 5
Reply 7, posted (6 years 3 months 3 weeks 4 days 1 hour ago) and read 5440 times:



Quoting Jacobin777 (Reply 5):

No chance on JFK and ORD...extremely competitive routes and fully established. BOS might have a small chance since there really isn't any StarAlliance members flying the route.

I tend to disagree. I think as there is no Star flight on this route yet they will surely be able to atleast make one or two flights work with a A332 or even A333.

GlobeEx



As you may presently yourself be fully made aware of, my grammar sucks.
User currently offlineUAL777UK From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Reply 8, posted (6 years 3 months 3 weeks 4 days ago) and read 5337 times:



Quoting GlobeEx (Reply 7):
I tend to disagree. I think as there is no Star flight on this route yet they will surely be able to atleast make one or two flights work with a A332 or even A333.

Agreed. Star, need to get back in this market and BD would be the perfect fit with LH backing and at least to start with a couple of flights a day on the route. BOS seems like a natural second choice as well.


User currently offlineBabybus From , joined Dec 1969, posts, RR:
Reply 9, posted (6 years 3 months 3 weeks 4 days ago) and read 5275 times:

LH will definately stabilize BMI which has been running around the airline world like a headless chicken.

I also hope that LH will try and develop another long haul hub for the UK instead of always focusing on LHR.

Michael Bishop can walk away (hopefully!) with the accolade of achieving nothing for the airline except confusion, disappointment and lost opportunities.


User currently offlineAIR MALTA From Malta, joined Sep 2001, 2498 posts, RR: 1
Reply 10, posted (6 years 3 months 3 weeks 4 days ago) and read 5238 times:



Quoting Babybus (Reply 9):
Michael Bishop can walk away (hopefully!) with the accolade of achieving nothing for the airline except confusion, disappointment and lost opportunities.

Well I hope Bishop is wise enough to not allow this LH takeover. We need s stronger UK airline not a STAR invasion of LHR.



Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
User currently offlineVinniewinnie From United States of America, joined Nov 2005, 789 posts, RR: 0
Reply 11, posted (6 years 3 months 3 weeks 3 days 23 hours ago) and read 5139 times:

Well you could actually imagine 2 phases:

1) LH buys BMI
2) LH buys VS

Would make sense! BMI and VS do not have any overlapping network and one can feed traffic onto the other! All depends whether SRB is willing to sell!

Alternatively LH and SQ could start buying airlines in Europe together... That make LH much more stronger than Air France-KLM. And it would give Emirates a run for its money!

Interesting tiems ahead!


User currently offlineUAL777UK From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Reply 12, posted (6 years 3 months 3 weeks 3 days 22 hours ago) and read 5014 times:



Quoting AIR MALTA (Reply 10):
We need s stronger UK airline not a STAR invasion of LHR.

Thats obviously a matter of opinion, you of course would prefer BA to take over BD. Competition is healthy. Why shouldn't STAR have a major presence at LHR and give BA a run for their money or any other carrier for that matter?


User currently offlineScouseflyer From United Kingdom, joined Apr 2006, 3386 posts, RR: 9
Reply 13, posted (6 years 3 months 3 weeks 3 days 22 hours ago) and read 4981 times:

So when/if this happens does we expect that the BMI name will be retained - my thoughts would be to keep it for the internal and European stuff and re-brand the longhaul flights as LH.

It is always possible that they're only really interested in the LHR slots and will off-load everything else shortly after the takeover?


User currently offlineAIR MALTA From Malta, joined Sep 2001, 2498 posts, RR: 1
Reply 14, posted (6 years 3 months 3 weeks 3 days 21 hours ago) and read 4945 times:



Quoting UAL777UK (Reply 12):
Competition is healthy. Why shouldn't STAR have a major presence at LHR and give BA a run for their money or any other carrier for that matter?

Competition is healthy indeed. But you have tp agree that London (and generally the UK) is the most competetive market in Europe. AF/KL and LH do not have to face a lot of competition from local rivals on their hubs. Germany has even limited EK's access to its airport by imposing traffic right restriction, which is not the case in the UK. BA and BD networks hardly overlap so there is no real competition between both of them except on routes to the UK plus AMS and BRU. A BA/BD merger could create a more competitive UK airline with a better netwrok from LHR (we can even see more routes transferred from LGW to LHR).

An LH takeover will mean even more competition at LHR and expect some players to go belly up. It could be BD, BA or VS then. We need a consolidation in the UK market. And we need to protect our assets not sell them (look at BAA and Ferrovial).

And finally, does anyone think seriously that LH's service is better than BA's??!!!



Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
User currently offlineUAL777UK From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Reply 15, posted (6 years 3 months 3 weeks 3 days 21 hours ago) and read 4861 times:



Quoting Scouseflyer (Reply 13):
So when/if this happens does we expect that the BMI name will be retained - my thoughts would be to keep it for the internal and European stuff and re-brand the longhaul flights as LH.

LH dont have a habit of changing any airlines name IIRC that they have bought, so I doubt BD name would dissapear. I would expect you would see some type of LH branding on the aircraft but nothing major.

Quoting AIR MALTA (Reply 14):
AF/KL and LH do not have to face a lot of competition from local rivals on their hubs

Thats because LHR is effectively "the centre of the universe" in terms of Europe, hence why its such a massive internationl gateway, and lets not forget London as a base as a massive tourist attraction and of course financial hub. More so that FRA and CDG (Paris is obviously a popular tourist destination as well).

Quoting AIR MALTA (Reply 14):
And finally, does anyone think seriously that LH's service is better than BA's??!!!

Your point being what exactly? Maybe they dont, maybe they do, either way they are arguably BA's biggest competitor in Europe, making massive profits, they have a massive war chest and now they are going to muscle in to BA's own back yard.


User currently offlineGroobster From United Kingdom, joined May 2001, 310 posts, RR: 0
Reply 16, posted (6 years 3 months 3 weeks 3 days 21 hours ago) and read 4836 times:

It certainly would be interesting if LH built up a proper second UK base for BD, like they did in Germany with MUC.

Now that BA has pulled out of almost everything at MAN, maybe under LH's guidance BD expand and build a long-haul hub.



Next flights: MAN-IST-AUH-MAN
User currently offlineIcelandair From Iceland, joined Jun 2005, 84 posts, RR: 0
Reply 17, posted (6 years 3 months 3 weeks 3 days 20 hours ago) and read 4701 times:



Quoting UAL777UK (Reply 15):
Your point being what exactly? Maybe they dont, maybe they do, either way they are arguably BA's biggest competitor in Europe, making massive profits, they have a massive war chest and now they are going to muscle in to BA's own back yard.

Very well said! Whether or not the service is better or worse (I'd say it is on pair most of the times) doesn't really matter here.



http://www.flugbegleiter.net/
User currently offlineScbriml From United Kingdom, joined Jul 2003, 12462 posts, RR: 46
Reply 18, posted (6 years 3 months 3 weeks 3 days 20 hours ago) and read 4691 times:
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Quoting AIR MALTA (Reply 10):
Well I hope Bishop is wise enough to not allow this LH takeover.

Too late!

Quote:
The timing and price had already been agreed with bmi majority owner Michael Bishop and the money had been set aside for the transaction




Time flies like an arrow, but fruit flies like a banana!
User currently offlineJoFMO From Germany, joined Jul 2004, 2211 posts, RR: 0
Reply 19, posted (6 years 3 months 3 weeks 3 days 20 hours ago) and read 4630 times:



Quoting AIR MALTA (Reply 10):
Quoting Babybus (Reply 9):
Michael Bishop can walk away (hopefully!) with the accolade of achieving nothing for the airline except confusion, disappointment and lost opportunities.

Well I hope Bishop is wise enough to not allow this LH takeover. We need s stronger UK airline not a STAR invasion of LHR.

He successfully fought against the big evil dragon BA for many years. And he kept BMI afloat for all that years. It is very difficult to survive as the number 2 airline, even when you are based in LHR. There are not many airlines that were successful in an equivalent position against their flag carriers. Where else do we have a 2nd full service carrier in Europe?
Deutsche BA was a huge disaster, Spanair is doing anything than fine and I can't think of any another serious contender. Only the likes of Air One and Aegan seem to do fine, largely because they have incompetent dinosaurs like Alitali and Olympic as opponents.
So I think BMI did a fine job so far!

Quoting Scouseflyer (Reply 13):
It is always possible that they're only really interested in the LHR slots and will off-load everything else shortly after the takeover?

I read a comment like that in the press. It was suggested that LH might later sell BMI off to BA in exchange for getting IB from them. Could make sense for BA and LH but would certainly be a very evil deal....

Quoting AIR MALTA (Reply 14):
And finally, does anyone think seriously that LH's service is better than BA's??!!!

Once you are in the cabin you are right. But on the other hand it is nice to know that you will arrive right in time and have your luggage available at the destination....

Beside that sarcasm, it is not expected that LH would transform BMI into a British Lufthansa. BMI could still offer the same product they currently do and which is supposed to be superior to LH's. As long as BMI performs decent there wouldn't be much interference from LH. Their relation to LH would be very much the same way the one SWISS currently has with LH.


User currently offlineBrianDromey From Ireland, joined Dec 2006, 3920 posts, RR: 9
Reply 20, posted (6 years 3 months 3 weeks 3 days 20 hours ago) and read 4627 times:



Quoting Babybus (Reply 9):
LH will definately stabilize BMI which has been running around the airline world like a headless chicken.

I think thats a little unfair. BA constantly gets lambasted for "abandoning the regions". BD took a different approach, they stripped out cost and launched WW. Overall the BD group made about £32million last year, which is not bad. This year could be a very different story though.

Quoting Babybus (Reply 9):
Michael Bishop can walk away (hopefully!) with the accolade of achieving nothing for the airline except confusion, disappointment and lost opportunities.

I think this is also a little unfair. He has created a capable competitor to BA on markets they share. At the end of teh day is was his own money on the line, unlike at other airlines. Can you really blame him for being somewhat cautious? How many million of your own cash would you be putting up against BA?

Quoting UAL777UK (Reply 15):
I would expect you would see some type of LH branding on the aircraft but nothing major.

I'd be surprised. Regional LH partners do carry "partner of Lufthansa" but not LX. There is no LH branding of any type on LX aircraft. The only reference to LH is on some pages of the timetable, the in-flight magazine under partners. All flights are codeshared as well, but other than a brief welcome to "our partner Lufthansa"'s' passengers there is no mention of them at all.

Quoting Groobster (Reply 16):
Now that BA has pulled out of almost everything at MAN, maybe under LH's guidance BD expand and build a long-haul hub.

I think this is a very strong possibility. Apparently LH does very well out of MAN to a lot of destinations. I think an increased long haul fleet at both MAN and LHR could be priority number one. A lot of it might depend on how willing SRB is to shack up with BD/LH. He has been touting for a merger for years. Wither this is because he has no hope of being granted one by SMB and he just wants the free press inches remainas to be seen.

Brian.



Next flights: MAN-ORK-LHR(EI)-MAN(BD); MAN-LHR(BD)-ORK (EI); DUB-ZRH-LAX (LX) LAX-YYZ (AC) YYZ-YHZ-LHR(AC)-DUB(BD)
User currently offlineOta1 From Germany, joined Apr 2008, 399 posts, RR: 0
Reply 21, posted (6 years 3 months 3 weeks 3 days 20 hours ago) and read 4585 times:
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So Air Malta, where have you been when BA took over a small German regional airline called Delta Air back in the early 90s, bought some 737s and called the DeutscheBA to compete with LH in Germany?
So now I don't see what's the problem with it beeing the other way around this time...

BTW... LH has a call option on Sir Micheal Bishops share in BMI.. so basically the only thing he could do to keep LH out of it was to close it down before LH can buy... highly unlikely though


User currently offlineEPA001 From Netherlands, joined Sep 2006, 4721 posts, RR: 39
Reply 22, posted (6 years 3 months 3 weeks 3 days 20 hours ago) and read 4579 times:
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With this development and a possible purchase of Brussels Airlines, we see LH adopting a very different strategy then i.e. Air France and KLM followed, also with the last bid this combined airliner put up for Alitalia

With their stakes in Swiss, British Midland and possibly Brussels Airlines LH is growing almost invisible. I do not know if LH has any steak in Austrian Airlines. But I mean this: by pursuing this strategy they succeed in the fact that many people in different European countries will fly on (partly or completely owned) LH subsidiaries; hence contributing to their network and operational profits. A difficult business process to model indeed, but it seems to be working for them if we see their annual figures. In the longer run they could even surpass AF-KLM-(Alitalia) as the largest and most successful airliner in Europe. BA will notice the effects of the LH success for sure! It will be interesting to see how they will react to this development. Maybe they will try to buy-out VS?

As mentioned by other members here: Interesting times indeed (on both sides of the Pond I might add)!

Kind regards


User currently offlineAIR MALTA From Malta, joined Sep 2001, 2498 posts, RR: 1
Reply 23, posted (6 years 3 months 3 weeks 3 days 19 hours ago) and read 4510 times:



Quoting Ota1 (Reply 21):
So Air Malta, where have you been when BA took over a small German regional airline called Delta Air back in the early 90s, bought some 737s and called the DeutscheBA to compete with LH in Germany?

Well, Delta Air was a small regional carrier. BA had its own operations out of TXL till 1990 I think. When traffic rights changed, they needed to buy a German carrier to continue operating in Germany.



Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
User currently offlineBurkhard From Germany, joined Nov 2006, 4395 posts, RR: 2
Reply 24, posted (6 years 3 months 3 weeks 3 days 19 hours ago) and read 4491 times:



Quoting BOStonsox (Reply 3):
Maybe they could launch some TATL flights out of MAN as well? BA dropped their MAN-JFK flight and I'm sure that BMI could connect a lot of people through there. Aren't the LHR slots going to be relaxed in the future when T5 is fully operational? Anyway, I think that BOS, JFK, and ORD would work, with LAS and MCO being possibilities as well. They should fly to BOS from MAN since nobody does right now and there are suitable connections on both ends.

Also my thinking. There is one airport in Europe that is famous as a spotter's paradise and an airline and passenger nightmare - LHR . I can imagine quite some routes westwards on A332 or even A343 to be profitable from MAN with feed from Germany, Switzerland, Brussels, Scandinavia, Milan. Which large US airports aren't on LH at all yet? SEA I know.

Less delays and less lost baggage. This definitvely would make a profitable BMI long range. In exchange, all traffic from the UK to south and east would be routed via FRA/MUC/ZRH, filling the A380s on the east routes.

Contrary to Swiss and AZ, neither BMI nor SN are loss makers. They are solid companies in a difficult market, so adding them can be made very carefully.


25 Cornish : I think its a fair comment actually - one shared across the industry since they lost many of their good managers and replaced them with marketing peo
26 Jacobin777 : UA didn't make JFK work after a number of years. Now with LH having a stake in B6 something might come up however I dont' expect to see BD fly LHR-JF
27 Ota1 : Well yes and no. What foreigne Airlines did at that time was providing service LH or any other German airline simply were not allowed to provide: lin
28 Snoopy : And that is why he SHOULD allow it. With decent competition at LHR it will force BA to get its act together. BA have been without decent local compet
29 ManchesterMAN : I don't really mind LH taking control of bmi. The only thing I would say is ... LEAVE OUR DIAMOND CLUB ALONE Please don't spread the Miles and More em
30 BOStonsox : London is a huge market from the US. There are plenty of small markets without service to LHR B6 can connect. I think they could start BOS-LHR and do
31 ZRH : SWISS a loss maker? Where in the world are you living? SWISS made a net profit of CHF 570 mi (€ 360 mi) in 2007 and contributed about 1/5 to LH's p
32 JoFMO : I assume he meant the point in time Swiss was bough by LH. While if LH would buy BMI or SN tomorrow they would both be profitable airlines.
33 Jacobin777 : Compared to the other large Euro Hence my comment above... Sure, but a large majority is O&D and the other majour cities can be easily connected.....
34 Burkhard : Thanks for translating. Yes, Swiss needed to be turned around, while SN and BMI "only" need to be focussed.
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