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BMI Warns Of Biggest Loss In Its History  
User currently offlineOa260 From Ireland, joined Nov 2006, 26853 posts, RR: 58
Posted (5 years 8 months 4 days 9 hours ago) and read 7595 times:

BMI warns of biggest loss in its history
By Kevin Done, Aerospace Correspondent
Published: November 28 2008 02:00 | Last updated: November 28 2008 02:00
BMI British Midland, the second biggest airline operating at London Heathrow, has warned employees it will suffer the largest loss in its history this year.

Nigel Turner, chief executive, has told staff the group had to restructure as it seeks "to ride out what is probably the worst crisis the aviation industry has faced".

http://www.ft.com/cms/s/0/c93c914e-b...a-0000779fd18c.html?nclick_check=1

Not good news for BMI . Who is to blame? Management?

27 replies: All unread, showing first 25:
 
User currently offlineGlom From United Kingdom, joined Apr 2005, 2815 posts, RR: 10
Reply 1, posted (5 years 8 months 4 days 8 hours ago) and read 7534 times:

NOOOOO!!!!

Should I be thinking about spending my accumulated miles quickly?


User currently offlineAdicool From Netherlands, joined Apr 2007, 298 posts, RR: 0
Reply 2, posted (5 years 8 months 4 days 8 hours ago) and read 7529 times:



Quoting Glom (Reply 1):
NOOOOO!!!!

Should I be thinking about spending my accumulated miles quickly?

NOOOOOO!!!!!
Don't worry folks, BD is in the shitters, obviously, but I think their future looks rather bright with the definite take-over by LH. BD is in desperate need of reorientation.


User currently onlineBrianDromey From Ireland, joined Dec 2006, 3916 posts, RR: 9
Reply 3, posted (5 years 8 months 4 days 7 hours ago) and read 7278 times:

As much as I love bmi, the worry set in for me when they started flying ERJ's into LHR from the regions. The cuts at baby me also suggest where the money is being lost....

Quoting Glom (Reply 3):
But I have enough miles for a first class round trip to America. What's UA's first class product like?

You'd be far better off in NZ J to LAX or AC J than UA first, IMHO. LH first would be the best way to go, however, or SQ fly FRA-JFK, could be a good way to combine them, LH on the way out (the connection is better and the F terminal at FRa is meant to be devine) and then SQ on the way back, again via FRA.



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 offlineTFFIP From United States of America, joined Nov 2008, 203 posts, RR: 0
Reply 4, posted (5 years 8 months 4 days 6 hours ago) and read 7170 times:

Looking very much forward to a seeing radically re-structured bmi under Lufthansa management skills.
Lufthansa UK perhaps?
There is quite alot said about Lufthansa intention by Austrian and Brussels Airways but nothing much about what they will do with bmi.

Quoting Glom (Reply 1):
Should I be thinking about spending my accumulated miles quickly?

Most likely it will be merged into Miles&More but at what equivalency remain to be seen.


User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3535 posts, RR: 3
Reply 5, posted (5 years 8 months 4 days 6 hours ago) and read 7110 times:

The positive for LH is that they can hardly make things worse  mischievous 

We've seen periodic postings for quite some time concerning very poor load factors on BD, even when others were doing well; so it should come as no surprise to hear that things are grim


User currently offlineBlueShamu330s From UK - England, joined Sep 2001, 2865 posts, RR: 25
Reply 6, posted (5 years 8 months 4 days 3 hours ago) and read 6822 times:

Let's see:

- Mainline LHR routes downgraded to Embraers. Landing fees as a part of costs must be eye watering.

- So many different service levels and classes, you've more chance of solving the Rubik's cube than you are of working it all out.

- Routes chopped and changed constantly. Hundreds of thousands invested in India and wasted. BA coming to stomp on them in Saudi.

- Wet leased/Damp leased/ Slighly Moist leased aircraft, passengers see no brand familiarity

- The obsession with LHR finally wins and the most profitable and revenue rich route gets pulled so the 330s can go to LHR to fly to some other over-saturated destination. "Hey, we're heading for out biggest loss, so let's withdraw and retrench to where we're REALLY losing the big bucks!"

- FF miles accrual ok on some baby fares but not the same on some mainline fares.

What a mess; no, what a complete, utter, bloody shambles.

Lufthansa, PLEASE, rescue these numpties.



So I drive a 4x4. So what?! Tax the a$$ off me for it...oh, you already have... :-(
User currently offlineCityofAthens From , joined Dec 1969, posts, RR:
Reply 7, posted (5 years 8 months 4 days 3 hours ago) and read 6776 times:



Quoting BlueShamu330s (Reply 6):

 checkmark 

Sadly, an accurate reflection of BMI's "strategy" over the years.

I am going to sit back with a hot chocolate and enjoy seeing what Lufthansa are going to do with them.


User currently offlineLeezyjet From United Kingdom, joined Oct 2001, 4041 posts, RR: 53
Reply 8, posted (5 years 8 months 4 days 2 hours ago) and read 6723 times:

Umm interesting development....

And just a couple of weeks ago, the VS haters of this forum were predicting Virgin's downfall in light of the LH buy out.............

"In the first six months of its financial year (March to August 2008), Virgin Atlantic and its tour operator arm Virgin Holidays saw revenues increase by 15 per cent from £1.19 billion to £1.37 billion (BDS$4.28 billion). Pretax profits rose from £43 million to £72 million. Cash in the bank increased to £688 million at the end of the first half of the year (2008-09), compared to £599 million at the end of the last financial year (2007-08)."

How things have changed in the last couple of weeks.....Now it appears why SMB was so keen to sell out to LH as BD are up sh!t creek !!.

Looks like VS could be in a good negotiating position after all.

 Smile



"She Rolls, 45 knots, 90, 135, nose comes up to 20 degrees, she's airborne - She flies, Concorde Flies"
User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7081 posts, RR: 57
Reply 9, posted (5 years 8 months 4 days 2 hours ago) and read 6688 times:

This is all a pity, because when you step onboard a modern BD airbus aircraft, you have smiling crew, a comfortable seat, good BOB meal selection, a generous FFP and a punctual service. The product is perfect - but something drastic has gone wrong in head office.

Question why the hell were bmi not focusing on their heathrow operation?

Quoting Oa260 (Thread starter):
Who is to blame? Management?

100% - since 2000 they have been distracted over and over again by nothing more than follies. Lets be a super long haul airline, Lets be a low cost airline,Lets go to India, Lets go medium Haul... Lets be part of an airline alliance

They purchased aircraft and airlines without knowing where to put them, knee jerked into launching a LCC at EastMidlands, grew a ERJ fleet when everyone else knew its basically impossible to make profits on point to point RJ flying, knee jerked into a quasi-LCC at heathrow,.... I could go on

In a nutshell: Every 18 months BD launches a new strategy that takes a lot of management time to set up, and it fails on them - some major examples:

Star Alliance membership (I expect a lot of flaming for this one)
A330 fleet Long Haul from Manchester
BmiBaby
Tiny Fares from Heathrow
OpenSkies campaign

It fails because they dont spend enough time focusing on one of them- before it beds down they start something else. Its like a child with ADHD

All of these has taken significant resources (cash and management time). Meanwhile they never spent enough time on their bread and butter:
Being the best short haul business airline from Heathrow

The fact that Bmi is using ERJ135's with less than 40 seats into the most slot restricted airport in the world points to something going horribly wrong in Marketing, distribution and strategic planning at their key advantage point - second largest holder of slots in Heathrow.

Key Failings:

* They failed to leverage Star Alliance to deliver connecting traffic - Alliance Membership is an expensive addition to the cost base if no return is being gained- ask Aer Lingus
* They had to advertise two airlines in the regions (baby and mainline) which doubles the cost of promotion, and more then halves the penetration
* They have three head offices for three companies (baby, regional, mainline)
* Their key point of customer interaction (website) is rubbish
* They tried to force a failing low cost concept from the regions onto a business airline at heathrow - the BmiBabyTiny fares concept was a complete disaster.

All the fault of a company not realising what their key value point was - a strong presence at Heathrow.

It was obvious that this dire profit warning was coming - The real death knell for Bmi was in the fact that Lufthansa valued the entire company at less than the valuation BD had for their slots at heathrow, which basically means that the company was a liability (If BD were to close down, and offload the entire fleet, staff and aircraft, the company would have attracted more cash for the BD owners)...

Depressing, isn't it.



The world is really getting smaller these days
User currently offlineOa260 From Ireland, joined Nov 2006, 26853 posts, RR: 58
Reply 10, posted (5 years 8 months 4 days 1 hour ago) and read 6589 times:



Quoting BestWestern (Reply 9):
Depressing, isn't it.

Sure is but good post lol...  Smile


User currently offlineAntonovman From United Kingdom, joined Mar 2001, 720 posts, RR: 1
Reply 11, posted (5 years 8 months 4 days 1 hour ago) and read 6476 times:



Quoting Leezyjet (Reply 8):
And just a couple of weeks ago, the VS haters of this forum were predicting Virgin's downfall in light of the LH buy out.............

I dont think they hate Virgin, just the guy who owns them - oops 51% of them


User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 12, posted (5 years 8 months 3 days 23 hours ago) and read 6010 times:

As I've been saying all along,they should have concentrated their full efforts out of MAN....so many carriers have been flying into man. EK is eating everyone's lunch there...2xB77W's.. Wow!

Granted EK does offer lots of connectivity to other locations, however, O&D, interlining would have done the trick for MAN-DXB for BD.

Routes such as MAN-ORD were already doing well. Also, they would have had a very nice catchment area (Liverpool, Birmingham, etc.) to work out of.

I think routes such as MAN-HKG/NRT were even possible...their A332's are more than capable....

Now they will become just a footnote in aviation history I'm afraid...



"Up the Irons!"
User currently offlineLAXintl From United States of America, joined May 2000, 24857 posts, RR: 46
Reply 13, posted (5 years 8 months 3 days 23 hours ago) and read 5979 times:



Quoting BestWestern (Reply 9):
* They failed to leverage Star Alliance to deliver connecting traffic - Alliance Membership is an expensive addition to the cost base if no return is being gained- ask Aer Lingus

Yes, BD's value to Star is somewhat questionable.

For instance I've seen statistics on point of sale data and frankly Star partners do not sell BD itineraries very much. Off course BMI does not help itself much with ever changing network, product and marketing direction. For instance exiting a market like LHR-CDG which provided some 100 interline connections daily at LHR does net help in building value for Star.



From the desert to the sea, to all of Southern California
User currently offlineTDubJFK From , joined Dec 1969, posts, RR:
Reply 14, posted (5 years 8 months 3 days 21 hours ago) and read 5700 times:



Quoting BrianDromey (Reply 3):
. The cuts at baby me also suggest where the money is being lost....

and hopefully one of the first things LH will do will be to ditch the baby. What a stupid and embarassing name for a LCC division. Only Snowflake and ContinentaLite came close IMHO.


User currently offlineMidEx216 From United States of America, joined Jun 2005, 651 posts, RR: 4
Reply 15, posted (5 years 8 months 3 days 16 hours ago) and read 5176 times:

Ugh, this is just no good. I was even looking to jump on the ORD-MAN route before it got canceled in April, but then I find that it's ending in January, and I definitely won't be able to get on by that time...

I really do hope BD pulls through this. Without losing too much of who they are.



"Cue the Circus Music!"
User currently offlineSomeone83 From Norway, joined Sep 2006, 3322 posts, RR: 3
Reply 16, posted (5 years 8 months 3 days 15 hours ago) and read 5102 times:



Quoting LAXintl (Reply 13):
BD's value to Star is somewhat questionable.

What they really have is a decent domestic route coverage from LHR


User currently offlineBA319-131 From United Kingdom, joined Jan 2001, 8506 posts, RR: 55
Reply 17, posted (5 years 8 months 3 days 15 hours ago) and read 5002 times:
Support Airliners.net - become a First Class Member!



Quoting BlueShamu330s (Reply 6):
Let's see:

- Mainline LHR routes downgraded to Embraers. Landing fees as a part of costs must be eye watering.

- So many different service levels and classes, you've more chance of solving the Rubik's cube than you are of working it all out.

- Routes chopped and changed constantly. Hundreds of thousands invested in India and wasted. BA coming to stomp on them in Saudi.

- Wet leased/Damp leased/ Slighly Moist leased aircraft, passengers see no brand familiarity

- The obsession with LHR finally wins and the most profitable and revenue rich route gets pulled so the 330s can go to LHR to fly to some other over-saturated destination. "Hey, we're heading for out biggest loss, so let's withdraw and retrench to where we're REALLY losing the big bucks!"

- FF miles accrual ok on some baby fares but not the same on some mainline fares.

What a mess; no, what a complete, utter, bloody shambles.

- Very true, such a shame, they used to be an excellent airline.



111,732,3,4,5,7,8,BBJ,741,742,743,744,752,762,763,764,772,77L,773,77W,L15,D10,30,40,AB3,AB6,A312.313,319,320,321,332,333
User currently offlineTFFIP From United States of America, joined Nov 2008, 203 posts, RR: 0
Reply 18, posted (5 years 8 months 3 days 13 hours ago) and read 4772 times:

Does anyone know of the current slot pairs BD has, how many mid to long haul pairs can be made out of them? (I don't know how calculation work)
BD CEO says they are on a good thing by developing the mid haul market, which other cities would be viable in this view?


User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7081 posts, RR: 57
Reply 19, posted (5 years 8 months 3 days 13 hours ago) and read 4721 times:



Quoting Someone83 (Reply 16):
What they really have is a decent domestic route coverage from LHR

Many served by Embraer 145's and 135's

Quoting LAXintl (Reply 13):
Yes, BD's value to Star is somewhat questionable.

And Vice Versa. Stars value to BD is also questionable - it is providing terrible feed to the BD network as it is today. With SkyTeam building a nice transatlantic network from Heathrow, BD has a long way to go in matching this.



The world is really getting smaller these days
User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7081 posts, RR: 57
Reply 20, posted (5 years 8 months 3 days 13 hours ago) and read 4647 times:



Yet again, Ryanair are accurate...

I bet you that this Flickr photo will never be used on the bmi website!

[Edited 2008-11-29 02:35:03]


The world is really getting smaller these days
User currently offlineCumulus From United Kingdom, joined Aug 2006, 1402 posts, RR: 1
Reply 21, posted (5 years 8 months 3 days 13 hours ago) and read 4597 times:

I don't care what the Airline is, be it a LCC or a full frills set up - they are all facing a huge challenge over the coming year.

As with all industries, it is a good thing as it will flush the sh*t out of the system.

We've all had it too easy for too long.

Cumulus.



What Goes Up Must Come Down, Hopefully In One Piece!
User currently offlineWAC From United States of America, joined Nov 2008, 275 posts, RR: 0
Reply 22, posted (5 years 8 months 3 days 12 hours ago) and read 4551 times:

BD never performed well financially.....that's why they kept on changing strategy....with the likes of BA/ Easyjet and Ryanair they can t compete in image or price or size...also the fact it has always been a private company rather than a public...financing for expansion always was hard...
BD was lufthansa/sas plan to keep an investment in the uk
Also the UK domestic market is probably one of the most competitive and self regulated. The sooner Lh gets their hands on it and the managers I think BD will be turned around


User currently offlineOA260 From Ireland, joined Nov 2006, 26853 posts, RR: 58
Reply 23, posted (5 years 8 months 3 days 10 hours ago) and read 4179 times:



Quoting BestWestern (Reply 20):
I bet you that this Flickr photo will never be used on the bmi website!

LOL.... would be funny if it did . Its the type of boo boo they would make!! Especially if it was in the hands of the ICC.


User currently offlineVV701 From United Kingdom, joined Aug 2005, 7393 posts, RR: 17
Reply 24, posted (5 years 8 months 3 days 9 hours ago) and read 4009 times:



Quoting Someone83 (Reply 16):
What they really have is a decent domestic route coverage from LHR

And it is so successful that they have, for example, recently signed a code share deal on their LBA-LHR-LBA EMB145 service with BA, presumably looking to BA to help better fill its aircraft.

Quoting TFFIP (Reply 18):
Does anyone know of the current slot pairs BD has, how many mid to long haul pairs can be made out of them?

BD had 543.5 weekly slot pairs at LHR at the start of the 2008 summer season but since then have had to transfer 27 pairs to BA as part of their deal to purchase BMED.

In theory many of these slots could be used for longer flights. However while aircraft like the BD 319s, 320s and their Astraeus operated 752s could be used in these slots on medium haul or even long haul routes, using the 330 would not be so simple. This is because this larger aircraft requires a "bigger" slot because of the greater separation needed on arrival and departure (because of wake turbulance) between it and the following aircraft.

And before anyone asks the obvious question, it was 543.5 weekly slot pairs!. BD actually had 1,087 weekly slots. And I cannot explain the odd number. Suffice it to say that the other operator with an odd number of slots at LHR last summer was BCS (European Air Transport) who had 27 slots (13.5 slot pairs!) mainly (exclusively?) operating short haul freight services for BA World Cargo. At first I started to think of a flight arriving at the end of one week and departing (after midnight) at the start of the next week. But that still requires a weekly slot pair or one slot at the start and end of each week!


25 BestWestern : BD's slots are also spread throughout the day which make it hard to operate trans atlantic flights which need an early morning arrival bank, the oppos
26 BabyblueBHX : Not as stupid or as embarrassing as you think! It's a was a gimmick that lead to some quite catchy and clever play on words advertising and lead to W
27 Bennett123 : I can get "free" flights on Baby because I have their Credit Card so I can not comment on their costs. However, I have had no complaints about their s
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