BestWestern
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BMI - CEO Shock Resignation

Wed Oct 27, 2004 7:48 pm

http://www.guardian.co.uk/business/story/0,3604,1336625,00.html

Who knows what this means for the future of the airlines many divisions

My concern is now the company will be lead by Finance and Legal - neither known to understand what the customer wants.

"Britain's second largest full-service airline, BMI, will today announce the abrupt departure of its chief executive, Austin Reid, in a boardroom reshuffle at the privately owned company. "

"Insiders suggested that the change was a sign that BMI's founder and chairman, Sir Michael Bishop, was reasserting control over the airline. Sir Michael owns 50.1% of the shares, with the rest held by Lufthansa and SAS. "

"BMI lost £9.8m last year, after falling £19.6m into the red the year before. The airline has struggled to cope with competition from low-cost carriers and from the fallout of September 11. "

"BMI's legal director, Tim Bye, was yesterday appointed deputy chief executive and Alex Grant was appointed chief operations officer. "

You are 100 times more likely to catch a cold on a flight than an average person!
 
7LBAC111
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RE: BMI - CEO Shock Resignation

Wed Oct 27, 2004 7:51 pm

This will only add fuel to the fire that BMI are in trouble. Big trouble.

7LBAC111
Debate is what you put on de hook when you want to catch de fish.
 
thowman
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RE: BMI - CEO Shock Resignation

Wed Oct 27, 2004 8:10 pm

Looks like fall out from the Virgin offer that was talked about on here last week. SMB was apparently indignant. Maybe Austin Reid had been pushing the merger?

It's interesting that the Guardian article claims that BMI Baby is successful.

BMI has established a successful low-cost offshoot, BmiBaby, to tackle competition from Ryanair and easyJet.

A
 
JGPH1A
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RE: BMI - CEO Shock Resignation

Wed Oct 27, 2004 8:21 pm

WW can hardly be called a roaring success - it is coming nowhere in competition with U2 and FR - just look at the wildly successful hub at LGW.

It could be that Mr Reid was pushing the merger with VS - it would be interesting to know what the views are of LH and SK (BD's big shareholders) on the idea of a merger with VS.

I'd agree with the comment about the airline being run by the CFO. Accountants are all very well in their place (  Smile ) but you need people with a bit of marketing and operational know-how to run an airline (look at Bob Ayling, the ultimate Accountant Airline CEO - didn't he do well !)

It's a shame BD is a bit directionless at the moment, they are a very good airline, part of the top global alliance, with a solid presence at the most sought-after airport in Europe. They should be doing much better than they are.
Young and beautiful and thin and gorgeous AND BANNED ! Cya at airspaceonline.com, losers
 
dutchjet
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RE: BMI - CEO Shock Resignation

Wed Oct 27, 2004 8:28 pm

Something is up at BMI, and its not very good......I am surprised that LH and SAS have not gotten more involved over at BMI to try to come up with some type of cohesive strategy for the airline. I have always wondered why BMI has not developed Manchester into some type of hub that could serve as a gateway to Europe - with lots of service out of MAN to German and Scandic cities that do not have nonstop service to the US or Canada - it all could be done on a code share basis with UA, SAS and LH, all of which just happen to be in the STAR alliance. MAN could be a good alternative to LHR.....its not as if anyone really likes connecting at Heathrow - its a pain. BMI has lost focus ever since it could not get the Heathrow-US routes that it wanted so badly (due to the lack or progress on B-2 and open skies).....its really time for BMI to "get over it" and come up with a new strategy for its mainline operations. Its a shame, BMI is a good airline, they can do so much better.

As for BMI baby, I think that the resources could be used better elsewhere.
 
col
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RE: BMI - CEO Shock Resignation

Wed Oct 27, 2004 9:18 pm

Agree Dutchjet. They should have a focus on MAN, I am sick of hubbing in LHR when I am forced to, when MAN is much easier and friendly. But it needs the involvement of all Star members including SQ, UA, US and the Europeans.
 
lnglive1011yyz
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RE: BMI - CEO Shock Resignation

Wed Oct 27, 2004 9:35 pm

Usually when a CEO "resigns" it usually means that there is a no-confidence move against him/her with the board of directors.

The company would appear to be in some trouble for sure, as we all know. -- They also may have a recovery plan on-the-ready, and perhaps the CEO was not quite willing to follow.

We had that happen at my company. We .. suddenly and without any of the normal 'rumors' that accompany such a decision, received an email informing us that the CEO had resigned.

Of course, when all the hype died down, it was discovered that he was not willing to follow the course of direction the board had decided on..

Sounds like this might be part of the decision here.

1011yyz

Pack your bags, we're going on a sympathy trip!
 
STARCREW
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 3:55 am

It was shock in work today Austin is kinda like part of the furniture... not happy about an accountant and a lawyer running the airline, certainly wouldn't want to be stuck in a lift with those 2 !

Alex grant is chief ops director, hes an airline guy and used to run regional so I guess thats good..

I agree with comments that bmi has lost direction are we a business airline or a leisure airline? The trouble is there was no other stratergy except LHR - US expansion. That looks to be changing finally. So much time and money has been spent on setting up baby that bmi mainline has suffered, cost cutting has been the only focus in mainline. Now we have a very cheap business shorthaul product and a basic ecy product. We need a complete overhaul of shorthaul. Longhaul is a good product but don't know how successfull it will be out of LHR because we are up against VS and BA with lie flat beds abd we only have 160 degree seats...but we do have onboard chefs who do a mean scrambled eggs with real eggs!!!!

Finally I know everyone thinks bmi is in trouble but if you worked for them and knew how tight the purse strings are held you wouldn't be worried...its financially well run......it just needs to decide what animal it is.
there is only ONEWORLD
 
AEROFAN
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 3:58 am

I disagree wholehaeartedly- Any one running a company, airline or no - should have a strong finance base. Someone from marketing discipline would only dream up silly schemes while displaying a lack of common sense
 
monkeyboi
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 4:05 am

just outta curiousity....on-board chefs? Can they actually COOk that much on-board? Must be difficult without utensils such as knives etc as well as the time constraints...........
 
whitehatter
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 8:25 am

Austin Reid was already working out his notice.

So it isn't a shock. He was planning to leave next year, he has just brought that forward. I wouldn't be surprised if this is because he has been head-hunted by someone else or even a non-aviation concern.

As for the regular chorus of BMI-is-doomed merchants, a couple of relatively tiny losses against the value of the operation is hardly the same as a US major type of Chapter 11 debacle. BMI is worth a lot of money, has good revenues and holds a chunk of valuable LHR real estate and landing slots.

Those slots alone are now valued at $1bn.
Lead me not into temptation, I can find my own way there...
 
STARCREW
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 2:59 pm

The chefs are fully trained proper chefs, they cook meals to order for business passengers. They have a kinda real kitchen on board with griddles, hot pans we've even got a toaster! imagine fresh toast on an airline for breakfast.

and they do a fab bacon butty at 5am... freshly grilled bacon!
there is only ONEWORLD
 
Beaucaire
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 3:55 pm

BMI did never have a strong media or marketing presence outside the UK. Most potential passengers in Germany,France ,Scandinavia or Italy never thought of BMI as an aggressive airline. They never had an immage here in France .I agree with Dutchjet that the parent-companies LH and SAS did a lousy job in integrating BMI in a helpful way into the Star-conglomerate.But I even think that LH are a little bit to descret about their presence currently and will face stormy days ahead with the "Vereinigung Cockpit" ( the pilot's union ).As the chairman of KLM said yesterday, even LH will become obliged to enter the race for mergers in the airline-world.Bare marketing-alliances as STAR are practicing might be an outdated model in the race for more cost-control and efficiency.But BMI should have been fully intergrated in LH and become an integral part of the system.Merge BMI,Germanwings,Spanair and Air-One in Italy into one operating unit executing LH feeders into STAR hubs in Europe ,use MAN as gateway to the US beeing fed by Germanwings,Air One,Spanair and BMI .
Please respect animals - don't eat them...
 
Skymonster
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 4:21 pm

The early departure of Austin Reid is indeed an interesting development. Slightly contrary to what has been said above, I wonder whether this is prelude to the merger going ahead - whilst Austin joined BMI from outside of the airline industry, Nigel Turner and Alex Grant are pretty hard-nosed guys and I do wonder whether the reshuffle is designed to bring more pragmatic and commercially minded people to the fore to close the merger deal on terms that are the best for SMDB.

Andy

PS: If you're that interested in the food on board, you can always read my trip report...  Big grin

http://www.airliners.net/discussions/trip_reports/read.main/50793/
There are old pilots and there are bold pilots, but there are no old bold pilots
 
star_member
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 6:18 pm

a merger with VS would make complete sense. hope it goes ahead. VS in star would be great especially now it is flying to sydney. we have lacked a non stop star alliance airline option to hong kong for too long.
 
7LBAC111
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 6:26 pm

BMI have moved fast. They have already appointed their successor to Mr Reid and reshuffled the management. It would seem that this was less of a shock to BMI compared to the rest of us.

Source: http://news.airwise.com/stories/2004/10/1098893627.html

7LBAC111
Debate is what you put on de hook when you want to catch de fish.
 
srbrenna
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 7:19 pm

VS and BMI? Can't see it as there would huge antitrust implications. The US would certainly not be happy about it especially as more access to LHR is what they are after
 
JGPH1A
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 8:33 pm

I doubt there would be much of an antitrust issue, since their business overlap is virtually nil. Even their combined slot total at LHR won't make a dent in BA's for instance. Anti-trust issues only arise if competition is threatened entirely, and there is plenty of competition for a combined BD/VS business.
Young and beautiful and thin and gorgeous AND BANNED ! Cya at airspaceonline.com, losers
 
dutchjet
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 8:35 pm

Also remember that a BMI/Virgin merger would result in an airline with LH, SK and SQ all sitting around the table as major shareholders.....I am not sure that any of these airlines would be interested in that.
 
7LBAC111
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 8:55 pm

Surely though there is nothing preventing Virgin buying BMI. Doesnt UK law say that if they can obtain around 28% of the shares of a comany it can launch a takeover?
Debate is what you put on de hook when you want to catch de fish.
 
thowman
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RE: BMI - CEO Shock Resignation

Thu Oct 28, 2004 9:11 pm

The thing's that stopping them buying the shares are the fact that Sir Michael Bishop owns 51% of them, and Lufthansa and SAS the rest. If they don't want to sell.....

Also, I think it's privately owned - and not a plc?
 
Skymonster
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RE: BMI - CEO Shock Resignation

Fri Oct 29, 2004 12:30 am

Directors have come and gone at BMI with monotonous regularity over the years - it just depends on how long the face continues to fit. However, I must admit that Austin's premature departure is a surprise as I thought he was regarded as one of the time-serving stalwarts. Nigel has certainly had a meteoric rise, and its interesting to see that Alex F***ing Grant is coming back from exhile (or was it toughening school) at Regional!

Oh well!!!

Andy
There are old pilots and there are bold pilots, but there are no old bold pilots