THURSDAY JANUARY 10 2002
Bmi to launch low-cost subsidiary to rival Go
BY BEN WEBSTER, TRANSPORT CORRESPONDENT
BMI british midland is to hit back at Go, the budget airline threatening its home base at East Midlands airport, by establishing its own low-cost subsidiary.
Go, based at Stansted, which was sold by British Airways last year, announced before Christmas that it would begin flying from East Midlands to several European destinations by the end of May. Bmi has already fired a warning shot against Go by challenging its application to fly from East Midlands to Prague.
The airline is expected today to announce the first stage of its strategy to prevent Go from encroaching on one of its key markets.
Last autumn, bmi denied reports that it was planning to convert into a low-cost airline. But Sir Michael Bishop, the bmi chairman, is understood to have recognised the need to strip out costs in order to compete with Go while at the same time maintaining bmi’s traditional full-service operation.
British Airways also attempted to compete in both the full-service and budget markets but last year admitted the strategy was flawed and sold Go for a substantial profit.
Earlier this week both EasyJet and Go reported sharp rises for sales in December in contrast to traditional carriers.
Copyright 2002 Times Newspapers Ltd.