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IAG Reaches Binding Agreement To Buy Bmi  
User currently offlineLHR27C From United Kingdom, joined Aug 2004, 1279 posts, RR: 16
Posted (2 years 8 months 3 days 9 hours ago) and read 18830 times:

BINDING AGREEMENT FOR BMI PURCHASE

Following the announcement on November 4, 2011, International Airlines Group (IAG) and Deutsche Lufthansa AG (Lufthansa)
have today reached a binding agreement for IAG to acquire British Midland Limited (bmi). The cost is £172.5 million in cash
though the price is subject to significant reductions. bmi consists of three distinct business units - bmi mainline, bmi
regional and bmibaby.

Transaction highlights:

· Acquisition of bmi for £172.5million in cash

· IAG's Heathrow slot portfolio to increase by up to 56 additional daily slot pairs

· Lufthansa to take on bmi's defined benefit pension scheme

· Lufthansa has the option to sell bmi regional and bmibaby before completion

· Significant price reduction if Lufthansa does not opt to sell bmibaby before completion

· Deal subject to competition clearance

· Earnings per share (EPS) accretive by 2014 at the latest

· 2015 operating profit target of E1.5 billion to increase by more than E100 million with consequent increase in EPS

· Underpins goal of 12 per cent return on capital employed by 2015

· Restructuring costs spread over three years and significantly lower in total than bmi's current annual losses

Willie Walsh, IAG chief executive, said: "Buying bmi's mainline business gives IAG a unique opportunity to grow at
Heathrow, one of our key hub airports. Using the slot portfolio more efficiently provides the option to launch new longhaul
routes to key trading nations while supporting our broad domestic and shorthaul network.

"This deal is good news for the UK as we will maintain a comprehensive domestic schedule including Belfast. Our plans to
expand our longhaul network would guarantee growth by making Britain better able to compete on a global scale. It will also
help maximise Heathrow's position as a world class hub airport.

"Customers will benefit from access to new destinations, more convenient schedules, enhanced frequent flyer benefits and
greater investment than had been possible for loss-making bmi.

"Given the scale of bmi's losses, there is an urgent need to restructure the business. Unfortunately, this will mean some
job losses but we will secure a significant number of high quality jobs here in the UK and create similar new jobs in the
future. IAG's purchase of bmi will protect more British jobs than if the airline had been closed and had its Heathrow slots
sold off. There will be restructuring costs spread over three years but these will be significantly lower in total than
bmi's current annual losses.

"bmi regional and bmibaby are not part of our plans and Lufthansa has the option to sell them before completion".

Financing

IAG intends to finance the purchase from its own funds. £60 million of the purchase price will be paid in four instalments
to Lufthansa pre-completion. This amount will be secured by Heathrow slots.

Pensions

Lufthansa has agreed to take on bmi's defined benefit pension scheme.

Timetable and conditions

It is hoped that the transaction will be completed during Q1 2012 subject to regulatory clearance from the European
Commission and other bodies. There is a termination fee of £10 million which is only payable by IAG if phase 1 EU
regulatory approval is not achieved by March 31, 2012 and either party elects to terminate the sales purchase agreement.

About bmi

bmi mainline operates Airbus aircraft to destinations in the domestic UK market, Europe, CIS states, Middle East and Africa
from London Heathrow. bmi regional operates an Embraer fleet and offers shorthaul flights within the UK and Europe from 7
regional airports. bmibaby operates Boeing aircraft and is a low-cost airline flying primarily out of East Midlands and
Birmingham airports.

bmi reported gross assets of £284 million as at December 31, 2010 and a £153 million loss before tax on revenues of £777
million for the year 2010.

ends

December 22, 2011


Once you have tasted flight, you will walk the earth with your eyes turned forever skyward
226 replies: All unread, showing first 25:
 
User currently offlinebeeweel15 From United States of America, joined Nov 2003, 1750 posts, RR: 0
Reply 1, posted (2 years 8 months 3 days 9 hours ago) and read 18784 times:

Oh well I guess VS is out of this battle for BMI and LHR. Now why cant they make LGW or STN a major hub but still maintain a presence at LHR like CO/UA has a major hub at EWR but has a small presence at JFK & LGA.

User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8548 posts, RR: 13
Reply 2, posted (2 years 8 months 3 days 9 hours ago) and read 18778 times:
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While my heart would have preferred VS/BD as a combo in *A my head says this was the only realistic outcome. I think VS employees must be breathing a sigh of relief as I am sure that VS would have been broke within a year if they had been the 'successful' bidder. Interesting that LH are going to remain stuck with the pensions, I think that shows more than anything else how desperate they were to get BD off their plate. Now just get it through the regulatory hurdles and get BD out of *A and more importantly out of *A's LHR terminal to make room for someone else to move in.


Moderation in all things ... including moderation ;-)
User currently offlinesabenapilot From Belgium, joined Feb 2000, 2714 posts, RR: 46
Reply 3, posted (2 years 8 months 3 days 9 hours ago) and read 18754 times:

Just 56 slot pairs at best?
Looks like a whole lot of slots are going to remain with LH and its other brands...
Anybody cares to do the math of what slots are going to be taken out first?


User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8548 posts, RR: 13
Reply 4, posted (2 years 8 months 3 days 9 hours ago) and read 18737 times:
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BTW, is that BD's current total slot allocation? or are some being siphoned off in the deal?

Quoting LHR27C (Thread starter):
IAG's Heathrow slot portfolio to increase by up to 56 additional daily slot pairs



Moderation in all things ... including moderation ;-)
User currently offlinelhr380 From , joined Dec 1969, posts, RR:
Reply 5, posted (2 years 8 months 3 days 9 hours ago) and read 18719 times:

Very good news for IAG and BMI Staff. IAG really is the best thing for BMI to retain aircraft and and staff.

User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8548 posts, RR: 13
Reply 6, posted (2 years 8 months 3 days 9 hours ago) and read 18683 times:
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Quoting lhr380 (Reply 5):
Very good news for IAG and BMI Staff. IAG really is the best thing for BMI to retain aircraft and and staff.

I doubt very much whether they will retain many of the aircraft. Understandably I don't think they have any interest in BD itself, just the slots, and I think you will see any of the suitably timed ones being swapped out for longhaul widebody flights rather than wasted on short haul narrowbody ops.



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User currently offlineBMIFlyer From UK - England, joined Feb 2004, 8810 posts, RR: 58
Reply 7, posted (2 years 8 months 3 days 9 hours ago) and read 18629 times:

Sad times.

Not happy about this result at all. IAG are only after one thing - slots.


Lee



Sometimes You Can't Make It On Your Own
User currently offlinemikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2
Reply 8, posted (2 years 8 months 3 days 9 hours ago) and read 18622 times:

Great news for IAG and BA. New long-haul routes to emerging markets and no more sacrificing of the domestic and shorthaul network.

It is important to the UK as a whole, the UK economy and the long-term viability of LHR that the airport can offer good connectivity throughout the world but also to the UK regions.

I expect the VS exec's are dreaming up a new slogan to daub on the side of their aircraft as i'm typing.

Let the battle commence....(yawn)

N.B - I see by some posts that BD's failure is already being used as a platform to start knocking BA. How very dreary and predictable....

[Edited 2011-12-22 00:06:35]


Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
User currently offlineJQflightie From Australia, joined Mar 2009, 965 posts, RR: 1
Reply 9, posted (2 years 8 months 3 days 9 hours ago) and read 18556 times:

just a couple of questions out of this;

Is IAG going to keep the BMI name? or will its ops and aircraft be merged with BA?

I like the fact that they are going to keep a Domestic air schedual for UK  



Next Trip: PER-DPS-LOP-CGK-KUL-PVG-LHR, LCY-MAD-VLC, BCN-LYS-TLS-IST-JED-KUL-SGN-CAN-MEL
User currently offlineiainbhx From United Kingdom, joined Dec 2008, 242 posts, RR: 0
Reply 10, posted (2 years 8 months 3 days 8 hours ago) and read 18406 times:

Whinging from Branson in 3,2,1

Quoting kiwiandrew (Reply 6):
I doubt very much whether they will retain many of the aircraft. Understandably I don't think they have any interest in BD itself, just the slots, and I think you will see any of the suitably timed ones being swapped out for longhaul widebody flights rather than wasted on short haul narrowbody ops.

Well, that would make economic sense, wouldn't it. Most BD aircraft are on quite expensive leases, some will probably be retained in order to keep the slots warm until they have been rescheduled. I imagine that the owned aircraft will be retained by BA for longer. This will allow BA to start new longhaul routes, increase some long haul routes and possibly to restore some shorthaul services which have been chipped away at.

"up to 56" slot pairs is quite worrying, I wonder how many more LH group will seek to remove. I would guess that there's a secret lower value at which IAG would pull out of the deal.

It will be interesting to see what happens to DUB, it's good that Belfast is being kept on.



iainbhx
User currently offlinePanAm707320B From United Kingdom, joined Dec 2003, 97 posts, RR: 0
Reply 11, posted (2 years 8 months 3 days 8 hours ago) and read 18350 times:

Quoting mikey72 (Reply 8):
Quoting mikey72 (Reply 8):
N.B - I see by some posts that BD's failure is already being used as a platform to start knocking BA. How very dreary and predictable....

I presume this statement was intentionally ironic given your 'knocking' of VS?


User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8548 posts, RR: 13
Reply 12, posted (2 years 8 months 3 days 8 hours ago) and read 18351 times:
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Quoting iainbhx (Reply 10):
Well, that would make economic sense, wouldn't it. Most BD aircraft are on quite expensive leases, some will probably be retained in order to keep the slots warm until they have been rescheduled. I imagine that the owned aircraft will be retained by BA for longer. This will allow BA to start new longhaul routes, increase some long haul routes and possibly to restore some shorthaul services which have been chipped away at.

It definitely makes sense, IAG is a business, not a charity, they will want to get the best return they can on what is, after all, a reasonably major investment. Now I think the important thing is to get the regulatory side of things dealt with as quickly as possible in order to remove as much uncertainty as they can for the staff of BD. While there is no doubt that there will be job losses it is better to have some losses than to have the entire workforce lose their jobs as would otherwise have happened as LH would inevitably have had to pull the plug on BD.



Moderation in all things ... including moderation ;-)
User currently offlineslinky09 From United Kingdom, joined Jun 2009, 827 posts, RR: 0
Reply 13, posted (2 years 8 months 3 days 8 hours ago) and read 18337 times:

Quoting iainbhx (Reply 10):
"up to 56" slot pairs is quite worrying

Well, that's 784 slots per week, so in line with expectation is it not?

Quoting iainbhx (Reply 10):
Most BD aircraft are on quite expensive leases, some will probably be retained in order to keep the slots warm until they have been rescheduled.

Keeping 784 slots 'warm' is going to require quite a few aircraft, so I'll assume BA will want to aggressively renegotiate those lease agreements while seeking to backfill - how many remaining A320s does BA have on order for example and I wonder how quickly Airbus would make them available?

It's unfortunate that jobs will be lost, I see no reason to keep on Donnington for example, but for pilots and crews this should be good news (albeit, I know not how their packages compare with BAs, could be better for them?).


User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8548 posts, RR: 13
Reply 14, posted (2 years 8 months 3 days 8 hours ago) and read 18285 times:
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Quoting slinky09 (Reply 13):
but for pilots and crews this should be good news (albeit, I know not how their packages compare with BAs, could be better for them?).

I think that it will be excellent news for those who get to keep their jobs considering what the alternative would have been if BD had simply folded.



Moderation in all things ... including moderation ;-)
User currently offlinemikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2
Reply 15, posted (2 years 8 months 3 days 8 hours ago) and read 18247 times:

Quoting PanAm707320B (Reply 11):
I presume this statement was intentionally ironic given your 'knocking' of VS?

Not at all. The VS bandwagon has already started churning out garbish. Should be quite enjoyable actually.

The airline industry is unfortunately not 'fantasy' driven. Common sense is at a premuim most of the time.



Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
User currently offlineba319-131 From United Kingdom, joined Jan 2001, 8524 posts, RR: 54
Reply 16, posted (2 years 8 months 3 days 8 hours ago) and read 18223 times:
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Quoting sabenapilot (Reply 3):
Just 56 slot pairs at best?

- 56 per day, that's nothing to sniff at.



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 offlineiainbhx From United Kingdom, joined Dec 2008, 242 posts, RR: 0
Reply 17, posted (2 years 8 months 3 days 8 hours ago) and read 18220 times:

Quoting slinky09 (Reply 13):
Well, that's 784 slots per week, so in line with expectation is it not?

56 slot pairs is about in line with expectations. It's the "up to" bit, that intrigues me.

Quoting slinky09 (Reply 13):
Keeping 784 slots 'warm' is going to require quite a few aircraft, so I'll assume BA will want to aggressively renegotiate those lease agreements while seeking to backfill - how many remaining A320s does BA have on order for example and I wonder how quickly Airbus would make them available?

It's unfortunate that jobs will be lost, I see no reason to keep on Donnington for example, but for pilots and crews this should be good news (albeit, I know not how their packages compare with BAs, could be better for them?).

I don't think that BA has many 32x orders left, but I'm sure they can make some fairly quickly.

I am 99% sure that TUPE will apply to this deal, so terms and conditions will remain the same at least in the medium term. This may not be best for the pilots, but I imagine it would be better than being on BA Mixed Fleet for the crews.

I don't have a dog in this fight, being a mainly BHX flyer, I don't use BA very much these days (and I use LH group a lot) and also being a BHX flyer, BD has always been the airline up the road. But I will say that I've had a few flights this year on BHX-FRA operated by BD and I have been extremely pleased with all of them and will miss them on that route.



iainbhx
User currently offlineiainbhx From United Kingdom, joined Dec 2008, 242 posts, RR: 0
Reply 18, posted (2 years 8 months 3 days 8 hours ago) and read 18169 times:

Quoting ba319-131 (Reply 16):
56 per day, that's nothing to sniff at.

I had a couple of slack days at work in late November and I calculated that BA could keep the Middle East services and Belfast, add a couple to EDI, MAN and ABZ and probably eventually work around their slots to get about 20 new long haul pairs out of it and increase or add a few short-haul pairs.

I think the question is, what happens if LH hive off say 6 more pairs, then the regulators say that 8 pairs must be given to someone for LHR-DUB and 8 pairs for LHR-EDI/MAN competition and 8 pairs to Sir Beard for compensation. Then is the deal viable?



iainbhx
User currently offlineTCASAlert From , joined Dec 1969, posts, RR:
Reply 19, posted (2 years 8 months 3 days 8 hours ago) and read 18147 times:

Terrible news. Goodbye *A in the UK, and farewell to one of the best airlines ever to have graced our skies.

User currently offlinespeedmarque From United Kingdom, joined Jul 2005, 684 posts, RR: 1
Reply 20, posted (2 years 8 months 3 days 8 hours ago) and read 18145 times:

From Intranet this morning, BA CEO Keith Williams

IAG has informed the Stock Exchange today that it has reached agreement with Lufthansa to acquire bmi, subject to regulatory clearance.

Bringing bmi into the IAG group would be a great opportunity. It would strengthen Heathrow as a hub despite the absence of a third runway, open new market possibilities and enable us to compete more effectively with other global airline groups.

But it would also be a great challenge. Losses at bmi are substantial and deep-seated.

It is yet to be decided how bmi would be structured within the IAG group. My objective is for bmi to be integrated within British Airways’ operations. However, to achieve this, we must deliver cost and revenue reforms to our existing shorthaul business so that we can create a profitable integrated business.

We hope the regulatory process can be concluded within the next few months. Until we receive regulatory approval, this deal is not completed and bmi remains an independent competitor of British Airways and should be treated as such.

I am confident that if this acquisition goes ahead, it will enhance our group’s business plan, our drive for competitiveness, our plans for growth and our focus on customers.

This is an important development for our group, but we must not allow ourselves to be distracted. Everyone has done a great job in keeping our own business going during the current difficult times. We must continue to keep that focus.

ENDS


User currently offlinemdavies06 From United Kingdom, joined Aug 2009, 382 posts, RR: 0
Reply 21, posted (2 years 8 months 3 days 8 hours ago) and read 18128 times:

Was the news release that badly written so to give the impression that it was 56 weekly pairs?

784 slots is pretty much 100% of the current BD slot holdings isn't it? I wonder whether the 6 daily pairs of slots which LH allegedly sold to BA in autumn form part of this.

Surprising that LH and not BA is taking on the defined benefit pension scheme. I wonder how the transaction price would change if it is BA who take it on. The part of Bmibaby and regional is interesting. I wonder how much 'price reduction' there will be if baby is not sold seperately. I guess it is pretty clear that baby is worth very little even if sold seperately.


User currently offlineChazPilot From United States of America, joined Feb 2011, 80 posts, RR: 0
Reply 22, posted (2 years 8 months 3 days 8 hours ago) and read 18126 times:

I'm no authority on the matter, but does anyone else feel that 172.5m is rather "cheap" for the purchase of an entire airline in general? I know bmi has struggled recently, but still those are some valuable slots at LHR.

User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8548 posts, RR: 13
Reply 23, posted (2 years 8 months 3 days 8 hours ago) and read 18110 times:
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Quoting TCASAlert (Reply 19):
Terrible news. Goodbye *A in the UK, and farewell to one of the best airlines ever to have graced our skies.

While I am not particularly thrilled about BD disappearing into IAG the truth is that one way or another BD were doomed, they have been bleeding money for a long time now. At least this way, fingers crossed, a lot of their excellent staff will keep their jobs.

[Edited 2011-12-22 00:57:01]


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User currently onlinesteve6666 From United Kingdom, joined Sep 2003, 401 posts, RR: 0
Reply 24, posted (2 years 8 months 3 days 8 hours ago) and read 18037 times:

Quoting ChazPilot (Reply 22):
I'm no authority on the matter, but does anyone else feel that 172.5m is rather "cheap" for the purchase of an entire airline in general?

Hmmm, not when

Quoting speedmarque (Reply 20):
Losses at bmi are substantial and deep-seated.

The integration and synergy exercise will be huge, and frankly the purchase price is BA sharing the synergy with LH. BMI on its own pretty clearly has a negative value.

Interesting that the price actually goes down if LH don't sell off bmibaby prior to completion.



eu nasci ha dez mil anos atras, e nao tem nada nesse mundo que eu nao saiba demais
25 TCASAlert : True, unfortunately the actions of bad management put the livelihoods of some of the best staff in the industry right on the line. At least now there
26 PanAm707320B : Sorry, still not quite following you. Are you suggesting that you'd prefer to see a monopoly in the UK aviation industry rather than healthy competit
27 mikey72 : The media is going to have a field day with this one. The UK general public love the BA/VS feud and Sir Richard Branson is going to pull out ALL the
28 Bongodog1964 : Unfortunately the paying customers begged to differ. Its not really an airline though, its a crippling pension fund, attached to some expensive aircr
29 mikey72 : Not at all. BUT i've said before if VS had their way there would be NO airline alliances, NO Oneworld anti-trust, (NO Oneworld), NO IAG..... ....and
30 OA260 : Not good for BMI staff or their loyal customer base at all. Lets not sugar coat this ! Time will prove exactly whats going to happen and you will see
31 slinky09 : Now, yes, but when BMI had good management, a good network, and a good product, it was the airline of choice for many, and certainly over BA to many
32 skipness1E : I think the problem for those looking at this from overseas is that too many still see the position in the 90s with a plucky Virgin standing up for th
33 PanAm707320B : So you are suggesting competition is a bad thing. How strange. Many of your comments from the previous post are puzzling - both from a market and a B
34 OA260 : The sad thing about it is in the last 18 months things began to improve alot in terms of their product and catering onboard. Shame it was too little
35 scouseflyer : They have hardly any left to deliver - according to the Airbus O&D sheet there's one single A320 order outstanding for BA but there's also 2 A319
36 sabenapilot : So, which slots are plucked by LH then, because I was under the impression BD's portfolio was quite a lot bigger only recently? And what's with the "u
37 mikey72 : Nope, not saying that. How very strange though that you seem to think that VS should be able to curtail BA's efforts to be 'globally' competitive by
38 AndyEastMids : Virgin need to butt out - they put forward their table stakes, played the game for a short while, but they got out-played and outbid. I hope that the
39 skipness1E : The key take out, is that Virgin always want special treatment. They had a brilliant brand and award winning product yet in the last few years BA has
40 PanAm707320B : I agree with you there Mikey72 like I intimated in my previous post. Clearly we disgree entirely with each other on this point so not much use in con
41 GSTBA : Personally I wouldn't be suprised if BD's A319's and A320's end up down at LGW. The aircraft could be used to to replace BA's aging 737-400 fleet. The
42 Post contains images mikey72 : Every Virgin branded airline around the world survives by slurping off the top cream from the most lucrative markets/routes in any give region that t
43 PanAm707320B : Good post skipness1E - well constructed Fundamentally, my main beef is with what seems to be continued hostility simply to the fact that VS try to pl
44 TCASAlert : Competition may be global but we still need to protect our own interests above those of foreign competition. Agreed. BA are not the "Archangel Gabrie
45 Post contains images mikey72 : It's futile to try and incriminate BA for developments unfolding in the global airline industry as a whole. Hang on a minute, let me SAVOUR this... -
46 iainbhx : They are not eliminating their domestic competition. Their domestic competition is Easyjet and Ryanair. An airline running Embraer-145's on LHR route
47 FlyLondon : Finally others are seeing the light! Hopefully the 'cherry-pick and moan' business model is close to collapse
48 TCASAlert : Of course it is competition. Every passenger that goes to BD is not going to BA, that is competition in my books. And the competition is more than ju
49 CYatUK : Not sure if this has been discussed yet, but if we suppose that everything goes well and the transaction goes through, what could this mean for LHR? W
50 OA260 : I dont expect them to be as they are like any other Airline a business but we need to see beyond the PR spin that some people seem to get wound up in
51 skipness1E : Good post but Ryanair have gone from domestic flying having dropped PIK/BLK/NQY/BHD-STN inrecent years, it's the big Orange that are the main player.
52 PanAm707320B : Bingo. In public this will be played as a 'BA to the rescue' but ultimately it's all about the LHR slots.
53 mikey72 : BA have said all along and to this day they need the slots to expand and that there will be job losses. Damn right it's not a charitable move. Oh I s
54 Post contains images PlymSpotter : Very interesting indeed, I'd say the most interesting part of the whole announcement. So LH have about 3 months to find a 'buyer' and sell bmibaby, t
55 GCT64 : As a BD Diamond Club Gold this is sad but inevitable given the way the airline business is going. It would be nice if someone from BD actually sent me
56 scouseflyer : When I first joined this site, I ouldn't understand the hostility on here to VS's fleet planning but it's quite frankly laughable how many times that
57 Post contains images TCASAlert : No it wasn't alright, this was just one of the final nails in the coffin. The "Right" way of doing things should have taken place a decade ago, by ax
58 lapper : The sad thing is that during time of bad weather, BA tend to cancel their domestic services to be able to concentrate on getting the L/H flights out,
59 fcogafa : Also mentioned by Flightglobal is that DLH could make a large net loss on the deal if they don't manage to sell Baby and BMR in the mean time. If VIR
60 lhr380 : I'd like to see the BD owned airbus go into LHR to increase aircraft and replace older 73s at LGW. For that you need more pilots cabin and ground crew
61 parapente : London is the financial capital of the World.It is also these days the place that all the uber wealthy want to live/ have a house/ educate their chidr
62 bwaflyer : Probably as none of that has been decided. As a bmi employee, it will be probably be several months before I find out what the future holds for me re
63 MEA : The A330 in BA livery potentiall... SEXY! Anyone have any aircraft renditions?
64 skipness1E : A subfleet of two seems unlikely, if they're on the standard BMI extortionate elase costs, they'll be gone as soon as. Incidentally they're both just
65 TCASAlert : And as far as I know only one of those is owned, the other is leased so I doubt BA would keep them on.
66 Post contains images mikey72 : Now all the initial slagging off is over .... ...anyone think we might see more twin aisles to EDI and GLA ?[Edited 2011-12-22 04:29:12]
67 iainbhx : Well, not GLA, BD withdrew from there. EDI, however, is a possibility. I understand Willie has said BA will serve DUB direct, which is an interesting
68 garpd : I do, will post it when I get home. However, if BA decide to merge BMI into their operations (Can't see them NOT doing so) then those A330s will prob
69 SandroZRH : Make no mistake, LH are going to make sure that the best slots will remain with them. My airline alone has already received 10 new, very well timed s
70 skipness1E : Yes. BA know that the asset stripped slots won't be in the deal, there's still enough to make the deal a good one commercially and to ensure a future
71 mikey72 : Given LH's already incurred losses I think that ship has already sailed. I'm sure LH would quite happily ''give'' BD away. When it comes to BD with i
72 SandroZRH : It's probably the best possible deal for both airlines given the circumstances. For LH, it was probably the most painless way of getting rid of BD (d
73 mikey72 : As us Brits say - 'It's a balls up mate !' That's what it is. Mmmm.....meanwhile BA will be able to add some vital new links for the UK economy to it
74 UK_Dispatcher : I hope the British Midland name lives on in whatever bmi regional becomes. I grew up with BD as my local airline and started my airline career with th
75 Candid76 : Domestic competition needs to be looked at in a wider context. Competition in the domestic O & D market may come from Easyjet and Ryanair but the
76 Post contains images GCT64 : This is a very valid point - as a weekly London-Scotland commuter I have seen this happen many times - when BA are asked/told to reduce movements due
77 aireuropeuk733 : Didn't Bland Travel (the owner of GB Airways) sell its LHR slot for £125m just after it sold the airline to EZY? I'm not sure how many they had but
78 Post contains links richardw : It was the Bland Group and looks like they had four slot pairs to sell. The ft reported http://www.ft.com/cms/s/0/068875e8-8...42-0000779fd2ac.html#a
79 GCT64 : I suspect the IAG maths probably has the slots valued at greater than the deal value and the remainder of the package (the airline) as a negative (wh
80 Post contains images steve6666 : Going after Aer Lingus next? Do not forget the synergy value. It will be immense. (And I do now KNOW they have assessed it rigorously, I exchanged em
81 skipness1E : Ryanair have no domestic presence in the UK.
82 lhr380 : Doubt LH would want to give a Gulf carrier even more of a foothold into a Euro Airport
83 PanAm707320B : Another curious response mikey72...you've clearly taken this quite personally. I apologise for any offence caused. It's reasonable to assume that giv
84 fcogafa : Not mentioned so far is the possibility/likelihood that the competition authorities will make BAW give up some slots to competitors
85 richardw : What can the competition authorities enforce? Is it just give up slots? or Is it give up slots for the operation of specific routes? or other?
86 LHRFlyer : If you look at the competition authority remedies for AA/BA ATI, neither were required to give up slots. All that they had to do was lease slots to e
87 lhr380 : As with the JFK routes, its more about frequency then seats.
88 skipness1E : They compete on three domestics where the main competiton is easyJet from LGW, LTN and also STN. They operate a handful of European routes all of whi
89 richardw : Could VS be an 'entrant' in your statement?
90 sevenheavy : Or the much less sensational version of events. Order A346 and take all of the orignial batch (no story there) Order A380 (no story here) Defer A346
91 lhr380 : But why did they take them if they had no proper J cabin to put in, surely they would have known before ordering them? We now have 2? 330s travelling
92 skipness1E : G-VINE parked up for months as a white tail anyone? So we have EIGHT more A330s coming next year apparently as the leases are up and VS say they're a
93 VictorKilo : There are no real barriers to entry to fly between EMA/BHD/BHX and traditional LCC destinations through the UK and continental Europe. The aircraft i
94 richardw : Do UK labour laws allow the getting rid of existing employees at no cost and the hiring of new cheaper ones? I don't think it is as simple and easy a
95 mikey72 : I was joking. Doh !! Sorry but don't you mean ''now BD are bust'' ? It's bad enough that '''British''' Airways have to buy '''British''' Midland off
96 Post contains links skipness1E : http://www.bbc.co.uk/news/business-16298167 Willie Walsh, admitting that BMI is a loved brand in the UK and may survive as a stand alone entity within
97 LHR27C : Wouldn't it make more sense to adapt the UCS design with sufficient time to fit the A330s when they were delivered, rather than discovering at the la
98 PanAm707320B : Are you flirting with me mikey you old fox? Now you just sound like a DM reader. Bring up the drawbridge!! Seriously, do you really think LHR-GLA / E
99 skipness1E : What do the facts suggest? Was Glasgow so profitable it had to be dropped in March this year? It BLED cash as BMI were sandwiched between EZY on the
100 mikey72 : Stop it. You'll get us 'removed' and that will spoil all the fun. Well having the drawbridge down isn't doing us much good at the moment. Nothing wro
101 Post contains images Babybus : What's another key hub airport for BA? Didn't know they had one. Only LHR as far as I'm aware. It's good that BMI now has a buyer. If we lose the bra
102 lhr380 : LGW for Holiday Traffic and LCY for Business Traffic (And some holiday)
103 LHR27C : MAD - he's talking about IAG, not BA.
104 gilesdavies : Sad sad news for the British Regions regions if this deal is authorised by the Competitions Commission... Aberdeen, Belfast, Edinburgh and Manchester
105 shankly : Nearly choked on my porridge this morning when a BBC report on the IAG/bmi take over referred to "....rival Virgin...". Should have been more accurat
106 slinky09 : As I understand it, the problem was that the new UCS was designed for the B787 initially, as that was delayed it created a problem in that the A333 h
107 lhr380 : So what would you want to do with BMI, a loss making airline that not even LH could save? JFK is fully stocked with flights. New routes and freqences
108 mikey72 : It's sad sad news indeed. That's where it ends. BA is not the villain here. They are not attempting a hostile take-over of a healthy BD. Far from it.
109 Viscount630 : Nope! If they employ new people to replace anyone made redundant, for the same job at lower rates, they'll be in breach of several employment laws.
110 Richcandy : Belfast currently doesn't have any British Airways services. Currently BD fly BHD-LHR and EI fly BFS-LHR. It looks as likely that BA will replace BD
111 anstar : I believe it was also due to the US laws of having to have a certain number of disabled friendly seats in NEW cabins whicht he new UCS did not meet.
112 LHRFlyer : That's fair enough. But I bet no-one takes up on the offer. The competition authorities have no business telling BA what routes to operate at LHR/LGW
113 VictorKilo : That's my point - no one is going to want to buy the airline and integrate existing employees when, if they really wanted to, they could go out and g
114 anstar : Except LHR slots.
115 mikey72 : So what does that make the final score then ? Dirty Tricks Campaign BA v VS 0 - 1 American Airlines Anti-trust BA v VS 1 - 0 Iberian Merger BA v VS 1
116 RTFM : Actually he said 'well recognized in the UK'... not entirely the same thing.... Which would be what? This 'average man on the street'? Sorry, but tha
117 mikey72 : I don't know what VS are worrying about. As far as I can see VS has achieved its goal.... A - They are a niche carrier flying a global selection of t
118 TCASAlert : Exactly. The other *A carriers at LHR will all feel this, and what will that result in? You guessed it - reduced frequencies for *A carriers there. O
119 kiwiandrew : Ok, in an ideal world, I would have liked to have seen: A healthy well run second LHR based network carrier in *A Job security a sensible use of a hig
120 Post contains images PlymSpotter : I would disagree there; contrary to popular belief bmibaby have excellent brand awareness around BHX and their 737s are far younger than much of Jet2
121 FlyCaledonian : And let us not forget how many slots LH group has transferred to itself, SN and LX. Perhaps a few more (plus to OS) will be covered by this deal, ens
122 Viscount724 : CO paid $209 million for just 4 LHR slot pairs in 2008 in order to move their operations from LGW to LHR.
123 Post contains images mikey72 : Like Willie Walsh said. Sore losers ! In this industry you have to pay up and look big or..... take a hike !
124 kiwiandrew : Did you actually read my post? Please point to what specifically in that post makes me a sore loser?
125 Post contains images Revelation : I don't see how BA can get out of paying the leases, do you? And thus not very relevant. It's like saying PanAm was going gangbusters in the 1970s. T
126 mikey72 : Umm.... That is just absolutely 'classic' ! But it gets better.... That is nigh on impossible. But then there is... Like there was ''ever'' going to
127 david_itl : We can safely forget about VS operating LHR-MAN as they said they'd bin the route if they got hold of BD. What's proposed is the best option for all.
128 kiwiandrew : Aaah, I think I understand now. So what you are saying is it is 'wrong' for people to claim that VS is 'picked on and discriminated against' and peop
129 TCASAlert : I'm sorry but that is quite possibly one of the most narrow-minded comments I have ever seen on here and I can't for one moment believe you are being
130 mikey72 : No you said... ??
131 slinky09 : Who said that, really, the bs written about VS in this topic is amazing! Read it in the context of the reply I was giving, and, as someone else said:
132 kiwiandrew : A reduction in competition is NEVER a good thing, however, amongst all the bad options ( there were no good ones) this was, in my opinion, the least
133 Post contains images Airbus3801 : At least hopefully we can all agree we won't have to look at those stunningly horrible and dated BMI F/A uniforms any longer. Ultimately, the main iss
134 mikey72 : Even if that competition does everything in its power to create an uncompetitive environment for others ? Just to suit itself ? Even if that competit
135 bennett123 : Anstar Virgin has sold/is selling 2 old A340-300 at present. Luzair are taking one, and a new Bangladeshi carrier (Rajashahi?) the other.
136 awthompson : I don't think there will be a monopoly situation serious enough to bring about unfairly high fares, current low cost carrriers which fly to various L
137 Post contains links bestwestern : It is as simple as this: VS offers £50m BA offers £170m For Lufthansa, not a difficult choice to be honest. What was for sale: •up to 56 Heathrow
139 Post contains images PlymSpotter : Yes indeed, I am well aware of that, hence; I think the question is how far LH are prepared to go for a 'buyer' to take them away. For a start, there
140 bestwestern : Probably pne pound more than the cost to 'exit' the company - redundancies, lease terminations, ticket refunds, wind down, contract early - terminati
141 LHRFlyer : One bright spot, which I hope we can all agree on, is that there won't be any more fantasy BD-LH-VS LHR tie-up speculation threads!
142 LGWflyer : I don't think they'll be replacing the 734's so soon. They are expected to be around for at least a few more years, if anything the 319's will probab
143 SKY1 : Every single OneWorld member do serve FRA ...and because it should we to state that "Frankfurt is a pretty serious oneworld hub"? FRA, like LHR are i
144 skipness1E : STAR describe London (Heathrow) as a focus market, not a hub. They want to get as much O&D Londin traffic as possible but it's certainly not a STA
145 Revelation : Thanks for the sterotyping. In fact I have relatives in Derby, England, UK and visit them via air travel mostly via LHR every few years so I do know
146 TeamInTheSky : True, but you are like Mississippi, Tennessee, and Alabama combined, and last time I checked, there aren't that many flights between those states. I
147 Post contains images PlymSpotter : WW could fit nicely with BE at BHX, but I can't help thinking that it would overstretch BE to take on such a poorly performing company. Especially as
148 UK_Dispatcher : Absolutely agree - if the brand is kept in any form it should be British Midland. The British Midland brand was much loved and was associated with qu
149 iainbhx : It was BA regional and then BA Connect (aka BACon) from BHX, but as you say BHD will be a first. I suspect this is one that conditions get put upon.
150 slinky09 : I think Willie Walsh was just being respectful to the British Midland brand when he made his comments. Why anyone would want to incur the cost of run
151 Post contains images mikey72 : Aren't Star Alliance and LH happy with Frankfurt, Munich, Zurich, Vienna, Brussels etc ? Aren't Skyteam and AF happy with Paris and Amsterdam ? I know
152 Post contains images PanAm707320B : Only in interviews My point was that the public perception of this will be different from the reality...which seems like I'm stating the bleedin' obv
153 mikey72 : read below.. VS has spent its life playing to BA is the best option for BD. Straight from LH itself....
154 scouseflyer : I wonder based on these comments if BD might be developed as a domestic brand with BA international. I know that BA basically abandonned the domestic
155 rutankrd : For once we agree and this has been strengthened by LH Group from the regions for some time with direct flights from several airports, a process that
156 Post contains images skipness1E : I am greatly offended considering it's the UK under discussion and the man leading the buy out is Irish. Try harder Brand confusion was BMI's downfal
157 VV701 : According to the web site of Airport Coordination Ltd who distribute and monitor the use of slots at LHR (amongst other airports) BD had exactly 800
158 FlyCaledonian : Not sure what your point is here. The only unique route ex-LHR that BD operates is BHD, and IAG has announced this will remain (but with BA). MME, IN
159 VV701 : Certainly a good number of domestic flights must diappear. Consider as one example flights between LHR and ABZ. On this route BD operates small bmi R
160 liftsifter : Very disappointed by this announcement, I am one of the few that really loves bmi. And it seems like BA doesn't plan on taking on the Middle-East rout
161 Post contains images Revelation : So Ryanair is a national airline with it's home base in Stanstead? I think you've managed to cheese off both the Ryanair and the Aer Lingus fans in o
162 LHRFlyer : No decisions have been made on routes. Once again, those who want to castigate BA/IAG should remember that it was the only credible bidder for bmi an
163 mikey72 : Yes it is. There is far more competition at LHR than at any of the other airports too....for the same reason. Swings and roundabouts. How many airlin
164 rutankrd : Debatable beyond the north atlantic shuttles
165 lhr380 : Why? BA provides feed to non Oneworld airlines. I see connections to and from VS UA/CO KL etc all the time. The feed will still be there. See below.
166 mikey72 : It's not debatable at all.
167 SCL767 : Perhaps BA may lease a few slot pairs to LAN (LATAM) so that LAN could link its hubs in South America with LHR and join TAM at LHR...
168 LHRFlyer : London is one of the most competitive markets in the world. It's always one of the first destinations to be assigned new/refurbished aircraft by airl
169 rutankrd : Yes it is both Paris and Frankfurt connect to dozens MORE cities directly with many MORE carriers than your dear Heathrow so providing greater busine
170 Revelation : So the answer is to reduce competition at LHR? Makes my point, which is that one cannot compare percentages in a meaningful way because the situation
171 VV701 : The value of a slot is very clearly totally irrelevant to current levels of competition even if it can be a factor - but no more - in future changes
172 lhr380 : To add to the above, the other airports are also bigger and have more capacity and runway space then LHR
173 Revelation : On Planet Earth we see companies at highly slot constrained airports "squat" on slots merely to prevent their competition from getting them, whereas
174 Post contains images TCASAlert : This chart is comparing apples with oranges. For a start it compares alliances against single airlines, for some reason makes FR a national airline a
175 lhr380 : Its not comparing Alliances, its comparing airlines. AF/KLM are one group, just like IAG is with BA/IB, UA/CO is the same. FR is the odd one out of t
176 Post contains images LGWflyer : I am not 100% on this but I am sure the 734's have had refittings I think not so long ago, so they should be in much better shape than what they was.
177 RTFM : But presumeably if you included all the other SkyTeam carriers at CDG/AMS or Star carriers (or even just OS/SN/LX) at FRA that would also take them h
178 mikey72 : That is actually what's behind this whole exercise. It still remains though that CDG and FRA are far less competitive for choice of carrier. That's b
179 Viscount724 : Also AMS. LHR has long been a distant 4th in the number of directly served destinations and carriers among major European hubs.
180 jfk777 : I just love the LHR vs. CDG, FRA, AMS, ZRH, FCO slot comparisons. "BA should be allowed to buy BMI AF holds 59% of the slots at CDG", except CDG is a
181 ual777uk : Could not agree more, as soon as IAG get their hands on BD, that livery I am sad to say will be history , quicker than you can say British Caledonian
182 mikey72 : You're failing to mention why they 'shouldn't' be allowed to buy BD. LHR is a very liberalised market. Unlike say Germany or Canada we don't try and
183 rutankrd : Drivel International treaties remain , Current open skys EU obviously US subject to review Canada Singapore Brasil Morocco Germany and France similar
184 mikey72 : It's not a competition you know (??) This topic (BA/BD) is just about BA being able to secure and make the best use of the available LHR resources FO
185 rutankrd : i think you will have read what i have said and agree that this purchase is generally good for UK PLC with a strengthened BA. Oh and it IS a competiti
186 mikey72 : Well at least we have managed to extract something positive from your original post. Not without a 3rd runway (is it a competition) and some people t
187 AIR MALTA : It never ceases to amaze me how people are against this takeover thinking that it is bad for competition and bad for BD especially from our guys in t
188 JAL : So does this mean BMI becomes a OneWorld member once the deal is completed?
189 rutankrd : No in short order the Bmi brand will seize to exist !
190 mikey72 : Has a decision been made on that yet ?
191 rutankrd : I think it is save to say the brand will disappear much as BCAL and Dan-Air and various regional brands that formed BA Connect did in the past. That
192 mikey72 : I think you're right but I also think it is fair to point out that BD (bmi...whatever) is being purchased by IAG and not BA so comparison to the purc
193 rutankrd : Acknowledged but what else other than merger into BA brand does Willy Walsh do with bmi after the IAG acquisition ?
194 lhr380 : Even though it is IAG buying, it's BA that gets the most out of BD and will more then likely take some staff and aircraft
195 mikey72 : I think you're right I'm just assuming that IAG's master-plan is to keep the brand of whomever they purchase going. I guess BD could be the exception
196 bennett123 : Does BMI have any aircraft/staff based in Spain?.
197 skipness1E : Utterly brilliant and so very true.... In the market the BA brand wins over BMI every time, it's not like Iberia merging with BA. In the markets they
198 LHRFlyer : Although Willie Walsh has not explicitly said so, I don't think anyone is realistically expecting the bmi brand not to disappear after the merger. The
199 VV701 : As others have already said the purchase is by IAG. So taking this analogy further IAG did not merge BA and IB. On the other hand when BA purchased D
200 mikey72 : I'm just throwing this out there but would BA have anything to gain by transferring some if not all of its LGW longhaul services to LHR (post BD purch
201 GCT64 : I think this deal has every prospect of being bad news for LGW. I imagine someone in BA will be looking at the implications of moving the services th
202 lhr380 : BA already have mixed fleet at LHR providing a lower cost case, why have BD as well?
203 skipness1E : Why cut off your nose to spite your face? There are two parts to your question. Long haul and short haul. Short haul is understood to be a loss maker
204 LHRFlyer : Cabin crew costs are only one aspect. There's flight crew, engineering, and ground ops. Although BA has been through substantial reform it is still b
205 skipness1E : Given that bmi self handle and are losing millions are you really sure bmi's cost base is that much lower?
206 Post contains links VV701 : BD average personnel costs per head are certainly lower. According to UK regulator, the Civil Aviation Authority, the personnel costs of BD flight cr
207 skipness1E : Given that these are averages, br careful. Now compare short haul flight desk Airbus fleet and Mixed Fleet as these would be the option for BA operati
208 VV701 : I drew no conclusions from the facts. I simply answered your question and provided an authoratative data source for my response. Very clearly from th
209 oneworld77 : There is money to be made in LGW. I can't say whether BA are, but their loses are not as great as they were. For those babbling on about BD into OW a
210 LHRFlyer : At the operational level at least, bmi has always been leaner and more agile than BA. Keith Williams is on the record that he wants bmi integrated in
211 lhr380 : But BA already have that kind of operation when it comes to cabin crew, I don't see there being 2 entirely separate fleets (both flight and cabin cre
212 antonovman : I would guess that BMI cabin crew will be integrated into BA Mixed fleet
213 lhr380 : That would be me guess!
214 edina : It's the one cabin crew fleet they WON'T be integrated with Mixed Fleet....... Under TUPE legislation BMI staff will continue to earn at least their
215 LHRFlyer : The difference is that BALPA has a "scope clause" which means that if bmi is integrated into BA the bmi pilots can't operate as a separate fleet of f
216 JQflightie : can i just throw something out in the open........ has everyone forgot about IB, afterall IAG do own IB too.... whats stopping all of BD jets going to
217 lhr380 : They only have 1 route ino LHR.
218 VV701 : Current announced plans are for five 320s ordered by IB to be sold to BA on delivery. So while some of the BD fleet of 320s and 319s could go to IB t
219 skipness1E : Indeed the Iberia A320* fleet is being drastically downsized with many A320s having gone to Vueling via Clickair, some to Vueling direct and even the
220 Post contains images JQflightie : also, another question, as it seems like 'its all about slots' in LHR, how many slots do BA gain from BD out of MAN? I know BA used to have a MAN base
221 david_itl : BD at MAN: LHR 4 daily now EDI up to 6 weekdaily (via bmi regional) ABZ up to 4 weekdaily (via bmi regional) LYS 5 weekly (via bmi regional) You also
222 Post contains images JQflightie : so really thats not even worth keeping or expanding a MAN hub, thanks for that!
223 mikey72 : That's a breath of fresh air ! Are you sure you're in the right forum ? Many posters here gave me the impression they would like to see BD liquidate
224 Post contains images AIR MALTA : Not true. I have been one of the few that have predicted BA purchasing BD a few years ago and people here thought I was crazy That's the best outcome
225 antonovman : I worked for British Midland over 30 years ago and that rumour was rife even in those days. It was always expected that BMA (as they were then} would
226 skipness1E : BMI mainline have MAN-LHR, Manchester has the best coverage of holiday flights second only to LGW and BA LGW short haul is losing enough money withou
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