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BMI's £ 100,000,000 Loss!  
User currently offlineJonnyWishbone From United Kingdom, joined Jan 2007, 143 posts, RR: 0
Posted (5 years 6 months 1 week 9 hours ago) and read 10070 times:

Taken from Flight Global

http://www.flightglobal.com/articles...37/uks-bmi-turns-in-100m-loss.html

So where has it all gone so wrong... Heathrow OR Manchester? I'd love to know the facts here! It seems J fares from LHR are a lot cheaper than MAN fares ever were, so how they expect to make money on the 330s from passengers I don't know.

I imagine LH are delighted with this shambles!

43 replies: All unread, showing first 25:
 
User currently offlineHumberside From United Kingdom, joined Dec 2005, 4920 posts, RR: 4
Reply 1, posted (5 years 6 months 1 week 8 hours ago) and read 10000 times:



Quoting JonnyWishbone (Thread starter):
so how they expect to make money on the 330s from passengers I don't know.

The article says that medium haul routes are pretty much the only 'success' for bmi currently and medium haul will include CAI/TLV, so probably the best place to put those A330's



Visit the Air Humberside Website and Forum
User currently offlinePurpleBox From United Kingdom, joined Jun 2005, 325 posts, RR: 0
Reply 2, posted (5 years 6 months 1 week 8 hours ago) and read 9991 times:

Does anybody have a definate date for the LH purchase of SMB's shareholding?

I'm guessing that if the call option had not existed them LH would never have got involved.

LH will really have to clean house...

PurpleBox.

[Edited 2009-03-12 10:32:00]


Next Flights:STH-ATH-STN (A3), BHX-INV-BHX(BE), LCY-FRA-BOG(LH), EZE-FRA-LHR(LH)
User currently offlineJonnywishbone From United Kingdom, joined Jan 2007, 143 posts, RR: 0
Reply 3, posted (5 years 6 months 1 week 4 hours ago) and read 9337 times:



Quoting Humberside (Reply 1):
The article says that medium haul routes are pretty much the only 'success' for bmi currently and medium haul will include CAI/TLV, so probably the best place to put those A330's

Is that bodies or freight though? You can go to Cairo next week for £ 800 in business, Tel Aviv for £ 821, that's not a lot for a 'successful' route in 5 days time.

I tried booking to go MAN-LAS 8 months ago (before the pull out) and could not get a Biz fare 6 months in advance for under £ 7000! Same with ORD from MAN at £ 5000. After the refits, they jacked the prices up big style and never seemed to offer discount J fares. Yet the 'uber profitable' LHR routes seem to be for nothing. I know times are hard, but I just don't get why they quit an established route to join the Heathrow bloodbath!


User currently offlineCityofAthens From , joined Dec 1969, posts, RR:
Reply 4, posted (5 years 6 months 1 week 3 hours ago) and read 9200 times:

According to a newspaper article LH has been subsidising BMI European routes for a while.

Let's see if they can manage to work some magic and turn the airline around.


User currently offlineAirNz From , joined Dec 1969, posts, RR:
Reply 5, posted (5 years 6 months 1 week 3 hours ago) and read 9011 times:



Quoting PurpleBox (Reply 2):
I'm guessing that if the call option had not existed them LH would never have got involved.

They were not forced to exercise the share option. They could have rejected it but chose not to.

Quoting JonnyWishbone (Thread starter):
I imagine LH are delighted with this shambles!

Their 'problem' entirely.......they knew exact details (or should have) before the purchase.
No need to blame BMI for something LH chose to take on.


User currently offlineHotelmode From United Kingdom, joined Jan 2007, 460 posts, RR: 1
Reply 6, posted (5 years 6 months 1 week 2 hours ago) and read 8969 times:

Quoting AirNz (Reply 5):
They were not forced to exercise the share option. They could have rejected it but chose not to.

All the articles i've seen said LH were "obliged" to buy bmi by an option SMB had when he sold his initial stake in 1999. See here from business traveller http://www.businesstraveller.com/news/lufthansa-to-take-over-bmi

[Edited 2009-03-12 16:25:47]

User currently offlineWAC From United States of America, joined Nov 2008, 275 posts, RR: 0
Reply 7, posted (5 years 6 months 1 week 2 hours ago) and read 8832 times:

I think BMI will be switched into LHI! Wink (considering they outsourcing for LHR-MXP flights).
More seriously:
Well no real surprise. I think BMI always suffered from its' size. Not big enough to be a full-scale hub airline or a regional carrier. BMI has relied on connecting travel of *alliance partners. So what can LH do? Well I think they will re-organise BD's A330 to maybe LHI or SN or OS.....and just keep an A320s fleet at LHR. There is no trouble doing LHR-TLV on any of the A320s. They could even configure their A321 with a special long range cabin for J class (and they have 4 on order so there is no trouble with re-configuration of old a/c in terms of scheduling and cost) TBH I never saw a success in BMI having long-range a/c.
In the bigger picture I think we are going to LH doing a lot re-organisation of fleets if SN and OS (and even SK) come part of LH group and with newly launched LHI. A busy time for managers of a/c and scheduling I bet.


User currently offlineJQFlightie From Australia, joined Mar 2009, 978 posts, RR: 1
Reply 8, posted (5 years 6 months 6 days 23 hours ago) and read 8684 times:

how do they go on their US routes?
a airline based in NTL called Aeropelican (OT) have just been bought by the same guys who own BD and are upgrading the fleet to J41's and EMB's from the existing J32 A/C



Next Trip: PER-DPS-LOP-CGK-KUL-PVG-LHR, LCY-MAD-VLC, BCN-LYS-TLS-IST-JED-KUL-SGN-CAN-MEL
User currently offlineAnkaraflyjet From Turkey, joined Mar 2007, 267 posts, RR: 1
Reply 9, posted (5 years 6 months 6 days 19 hours ago) and read 7980 times:

BD sucees on medium haul is due to lack of competition in those destinations in the Middle East and CIS mainly. After LH takeover if BA codeshare will come to an end these routes may not be profitable alone on star alliance feed. Secondly there are other star carriers with very significant service developments in these markets like TK that can provide better connections than BD thru LHR. BD relies so much on their codeshare or Star Alliance feed from and to LHR.

The overall BD product will be the hardest to handle by LH as UK traffic is very different than ZRH, VIE or BRU.

BA policy on the medium haul flights to former BMED network will determine the future of BMI in these markets eventually.


User currently offlinePurpleBox From United Kingdom, joined Jun 2005, 325 posts, RR: 0
Reply 10, posted (5 years 6 months 6 days 18 hours ago) and read 7524 times:



Quoting WAC (Reply 7):
Well I think they will re-organise BD's A330 to maybe LHI or SN or OS........and just keep an A320s fleet at LHR. There is no trouble doing LHR-TLV on any of the A320s.

An interesting thought. Moving them to Milan would be another chapter of the BD A330 saga, but LH will never keep a long haul fleet of just three aircraft. They will either bring in more or reallocate them.

Are the BD A330's owned or leased?

PurpleBox.



Next Flights:STH-ATH-STN (A3), BHX-INV-BHX(BE), LCY-FRA-BOG(LH), EZE-FRA-LHR(LH)
User currently offlineJonnyWishbone From United Kingdom, joined Jan 2007, 143 posts, RR: 0
Reply 11, posted (5 years 6 months 6 days 13 hours ago) and read 6169 times:

An interesting theory is to see them back at MAN and to use MAN as a gateway to the US from Germany (HAM FRA DUS MUC and potentially TXL) / Belgium (BRU on SN) / Switzerland (ZRH / GVA) / Italy (New MXP base)

There was ALWAYS a market from MAN whatever the 'bad yield' mongers say, but apart from ORD, they never offered any consistency or tied in partners for the long haul. The usual do everything half cock BMI story.

If LH inject some Germanic 'structure' into the airline, it will have half a chance, but I fear that they will become history by JUST focusing on LHR


User currently offlineVV701 From United Kingdom, joined Aug 2005, 7530 posts, RR: 17
Reply 12, posted (5 years 6 months 6 days 9 hours ago) and read 5329 times:



Quoting AirNz (Reply 5):
They were not forced to exercise the share option. They could have rejected it but chose not to.

No.

LH had a "pull" option to buy Michael Bishop's shares. Michael Bishop had a "put" option under which he could sell his shares to LH. So the only situation where LH would NOT end up owning Bishop's shares was if he did not want to sell them AND at the same time they did not want to buy them. This seems to me to be a very unlikely scenario particularly as Bishop was 67 last month.


User currently offlineZKOJH From China, joined Sep 2004, 1696 posts, RR: 1
Reply 13, posted (5 years 6 months 6 days 6 hours ago) and read 4933 times:

in the back of the 'sun' newspaper 2day theirs a small clip on this and says that BMIBABY are part to blame, !! must be time for them to go, .


NZ 787-9 flying between PVG - AKL ! CAN'T WAIT!!
User currently offlineBmiexpat From United Kingdom, joined Sep 2005, 175 posts, RR: 0
Reply 14, posted (5 years 6 months 6 days 5 hours ago) and read 4855 times:



Quoting ZKOJH (Reply 13):
in the back of the 'sun' newspaper 2day theirs a small clip on this and says that BMIBABY are part to blame, !! must be time for them to go, .

1, I wouldn't believe anything I read in the Sun with regards to business news!
2, Results are not released for each airline in the group, only for the group as a whole and this has been the case since day 1. It has never been established what contribution to profit or loss bmibaby makes within the group.
3, The internal communication sent out by Nigel Turner rather surprisingly had only good things to say about bmibaby...
4, bmibaby is the only unit in the bmi group to be currently hitting budget.


User currently offlineAIR MALTA From Malta, joined Sep 2001, 2500 posts, RR: 1
Reply 15, posted (5 years 6 months 5 days 18 hours ago) and read 4643 times:

...LHR can't sustain 3 UK players! By having BD, VS and BA against each other, all of the three will at end fall into foreigners' hands... CDG, FRA, MUC and AMS do not have 3 national airlines competing against each other.

As long as this situation continues as it is today, BD won't make money, BA will cut more UK and Euro routes and VS won't expand...



Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
User currently offlineAIR MALTA From Malta, joined Sep 2001, 2500 posts, RR: 1
Reply 16, posted (5 years 6 months 5 days 18 hours ago) and read 4636 times:

and check this as well:

http://www.independent.co.uk/travel/...bargains-for-the-bold-1644445.html



Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
User currently offlineSuper737 From UK - Northern Ireland, joined Feb 2008, 105 posts, RR: 0
Reply 17, posted (5 years 6 months 5 days 17 hours ago) and read 4566 times:

For BD to turnaround this mess they need to do several things:

-Stop self handling at down-line stations i.e. BHD,GLA,EDI (DUB is already outsourced)
-Provide a definitive product i.e. either stop sending a pic n mix of aircraft from mid haul to cover short haul routes and then leaving customers feeling ripped off when a normal aircraft operates.
-Reduce middle management
-Get rid of that god awful website like really "official partner to the england rugby team, unofficial partner to the business traveller". It looks like something a 16 year old graphic design student has put together to practice.

This is only the beginning. LHR is not the gold mine people think it is. Also there fare rules and types are like a pregnant woman, you will never know what they will do!!! Baby fares or "w" class you can't pick your own seat like wtf?



If its not a super tractor its not a plane
User currently offlineBestwestern From Hong Kong, joined Sep 2000, 7147 posts, RR: 57
Reply 18, posted (5 years 6 months 5 days 15 hours ago) and read 4474 times:



Quoting Bmiexpat (Reply 14):
I wouldn't believe anything I read in the Sun with regards to business news!

How about the financial times then...

The airline, controlled by Sir Michael Bishop, was hit last year by the surge in the oil price, by higher airport charges at its main base at London Heathrow, and by big losses at its low-cost BMIbaby subsidiary.

http://www.ft.com/cms/s/0/15a98f2c-0...9-0000779fd2ac.html?nclick_check=1

Bmi Baby is toast....


I also dont buy how medium haul is performing so well - Russia is really struggling these days, and as for Ukraine...



The world is really getting smaller these days
User currently offlineStarGuy From United Kingdom, joined Dec 2005, 336 posts, RR: 0
Reply 19, posted (5 years 6 months 5 days 15 hours ago) and read 4450 times:



Quoting AIR MALTA (Reply 15):
..LHR can't sustain 3 UK players! By having BD, VS and BA against each other, all of the three will at end fall into foreigners' hands... CDG, FRA, MUC and AMS do not have 3 national airlines competing against each other.

I see what you are saying regarding BA, but BMI and Virgin do not compete with each other on any routes and in fact work with each other.


User currently offlineBmiexpat From United Kingdom, joined Sep 2005, 175 posts, RR: 0
Reply 20, posted (5 years 6 months 5 days 15 hours ago) and read 4440 times:

Bestwestern, I stand by my post. I'm not saying that it isn't true, I just refuse to believe it until I see confirmation from the company. bmi have never released a breakdown of the figures for each airline in the bmi group and until they do...

User currently offlineBestwestern From Hong Kong, joined Sep 2000, 7147 posts, RR: 57
Reply 21, posted (5 years 6 months 5 days 14 hours ago) and read 4366 times:



Quoting Bmiexpat (Reply 20):
I just refuse to believe it until I see confirmation from the company

So, the FT are making it up?



The world is really getting smaller these days
User currently offlineVV701 From United Kingdom, joined Aug 2005, 7530 posts, RR: 17
Reply 22, posted (5 years 6 months 4 days 15 hours ago) and read 4042 times:



Quoting StarGuy (Reply 19):
I see what you are saying regarding BA, but BMI and Virgin do not compete with each other on any routes and in fact work with each other.

But all three are in direct competition for slots.

Quite correct. But the situation for either BD or VS or, indeed BA would be a lot easier if LHR was not the HOME hub for all three airlines.

I can think of no other airport in the world with this level of local competition. Of course ORD is a MAJOR (but not home hub) for both AA and UA.

Although we read that BD is being successful as a Medium Haul airline following on from their purchase of BMED, it is worth remembering that at the end of last October (as part of the purchase deal) they had to transfer 54 weekly slots to BA. This would have given BD's accounts a welcome cash boot of around £30 million from the payment they received from BA. But unless some of the BD short haul flights in and out of LHR were doing pretty badly, that can hardly have been a welcome aspect of that deal.


User currently offlineBALHRWWCC From , joined Dec 1969, posts, RR:
Reply 23, posted (5 years 6 months 4 days 15 hours ago) and read 4024 times:



Quoting Humberside (Reply 1):
The article says that medium haul routes are pretty much the only 'success' for bmi currently and medium haul will include CAI/TLV, so probably the best place to put those A330's

Not sure about that. Yes BD have done well on the TLV. It started with a daily leased 757. It then recently switched to a daily A320/321 mix. From 29th March it will go to a twice daily service using the A330. Can't help but think this is a massive jump in capacity on a very competitive route. It would have made more sense either to have started the twice daily service and keping the 'A320/321 mix to see what the demand is like or continue the daily flight but add capacity by using the A330. That's a extra 200-300 seats per day they will have to fill.


User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7147 posts, RR: 57
Reply 24, posted (5 years 6 months 3 days 15 hours ago) and read 3690 times:

With BMI basically giving up short haul international flying I really hope that there is Gold at the end of the medium haul rainbow - but Bmi is looking more and more like Bmed as the days go on - and bmed ended in failure.

Dublin is their only short haul international route with competitive frequencies these days. BRU wont work with the ERJ.

Quoting BALHRWWCC (Reply 23):
From 29th March it will go to a twice daily service using the A330

Where else can they put the 330?



The world is really getting smaller these days
25 AIR MALTA : I really do not understand why are they are reducing BRU to ERJ. Soon SN is going to discontinue its code sharing with BA and jump with BD. BD would
26 JonnyWishbone : Ooh, ooh, how about MAN-ORD, a good market with a great UA feed if you did it right, with a reasonably priced J product and a great Y+ product. I won
27 AF022 : Which routes are actually profitable? JED, RUH, TLV perhaps? And what of FNA? Are they still wet-leasing those 757s? Must be costly to do this.
28 Kleiner : Could this be sold to VS as part of VS's "short-haul expansion into Europe?"
29 Planesarecool : Yep, I heard that they pulled their MAN routes just to annoy you... If these routes were the gold mine that you are making out, bmi wouldn't have pul
30 BestWestern : JED and RUH get competition from BA this summer.
31 Pe@rson : How the hell could A.nutters without inside information know whether particular routes are profitable or not? It's almost like stabbing in the dark.
32 David_itl : An airline who skewered the route to make it unprofitable. Bunch of clowns who are now having the chickens coming home to roost as the moronic insist
33 Theginge : Why in their right mind would any company skew a route to make it unprofitable?!??! BA is not the only airline to have pulled out of Manchester BMI m
34 BestWestern : Its not that black and white pearson. Competiton, load factor, capacity growth and promo fares are often a very good guide to the profitability of a
35 Mozart : I may have asked that question previously, but nevre got a plausible answer: with LH already holding a minority stake in BD since many years, I assume
36 Pe@rson : I realise those signs. Perhaps I was being a bit harsh. EZY @ TLV?!
37 BestWestern : Well, this is the million dollar question for Lufthansa. Swiss was the flag carrier of Switzerland with an excellent reputation for quality service.
38 TFFIP : please elaborate on that ... why vulgar? what routes are you traveling on mainly?
39 AirNZ : Yes, there is indeed somewhat of a pattern, but not for the reasons you are implying. When they want to withdraw from a route(s) but need a 'visible
40 JonnyWishbone : BMI were seeing good load factors (I know not necessarily yields, but a fair indication!), but re-fitted what was already the best product on the rou
41 AIR MALTA : I don't think arilines try to make any of their routes unprofitable. They usually try to make the route profitable but then if things do not get bett
42 David_itl : Rather like AI having a more profitable BHX-India route than ity's LHR routes but the BHX ones get pulled. Some may say that there appears to be vest
43 Humberside : El Al have served STN, at least in summer, for a number of years, albeit at once/twice a week But dont forget its likely Brussels Airlines will start
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