Concorde001
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More Bad News For Bmi

Sat Jan 07, 2006 2:33 am

Just saw the following link on PPRUNE.com.


Passenger numbers take a dive at bmi

"BMI British Midland has denied it is in crisis after official figures revealed it has been losing thousands of passengers while rivals are taking advantage of the revolution that has seen millions more Britons taking to the air every year

Latest statistics show that while low-fare airlines such as Ryanair, easyJet and FlyBe have been growing by more than 20% annually, the total number of passengers carried by bmi and its no-frills sister carrier bmibaby has been going down.


Filings with the Civil Aviation Authority reveal that bmi's European short-haul and international operation carried 5.5% fewer passengers during the key holiday month of August with passenger numbers down by more than 4% during the rest of the summer.

At its much-vaunted budget subsidiary bmibaby, summer passenger numbers rose by just 3% against growth at direct rivals easyJet and FlyBe of 21% and 26% respectively.

The figures suggest all is not well at the airline group headed and controlled by industry veteran Sir Michael Bishop, who has long resisted the entreaties of Sir Richard Branson to merge with Virgin Atlantic.

After reporting passenger growth of more than 11% in 2004, bmi has refused to publish monthly statistics since last February.

In May, new chief executive Nigel Turner admitted that, after four years of operating losses, the airline had lost touch with its customers.

Turner's solution was to scrap business class cabins on the vast majority of its flights and charge passengers for food and drink - a market repositioning move derided by rivals as 'confused and confusing'.

In recent months, 20% shareholder SAS, the Scandinavian airline, has indicated it has lost patience with bmi's losses and is aiming at divesting its stake - something that 30% shareholder Lufthansa of Germany has also been looking at.

A spokesman for bmi declined to reveal how many passengers it carried in 2005. He said comparisons with easyJet and FlyBe are unfair 'because they are concentrating on their budget model while we have been growing our long-haul product'.

The decline at bmi, which had been carrying more than a million passengers a month, comes as a range of younger airlines such as Jet2 and FlyGlobespan have more than doubled in size and stolen market share.

The CAA figures also reveal that the biggest loser in the declining charter market was MyTravel, which carried 34% fewer UK passengers in August at 570,000. That compared with Thomsonfly ( formerly Britannia) at 1.2m and Monarch at 700,000, both posting annual growth of 7%.

A spokesman for MyTravel said; 'We have cut capacity as we concentrate on margins, not volume."


Source: http://www.thisismoney.co.uk/news/ar...?in_article_id=406058&in_page_id=2

I don't know how much we can conclude from this - only when we see their press release on profit can we confirm what we are all thinking!

[Edited 2006-01-06 18:44:02]

[Edited 2006-01-06 18:45:37]

[Edited 2006-01-06 18:47:01]
 
Beaucaire
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RE: More Bad News For Bmi

Sat Jan 07, 2006 2:41 am

It is sad to say but Bmi lacks a clear strategy and marketing immage.
Customers don't find anything special when flyig with Bmi and their appearance is neither LOowCost neither full service-top quality,Bmi are a specialist for nothing !
Please respect animals - don't eat them...
 
GSM763
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RE: More Bad News For Bmi

Sat Jan 07, 2006 4:01 am

BMI need to decide what kind of airline they want to be. At the moment they are full service, low cost and regional and all 3 parts seem to have different development strategies. BMI regional have recently announced services that never got off the ground these guys need to decide what they are doing or they should leave the airline industry, maybe next Christmas someone should send them a copy of Airline 6!
 
Luke
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RE: More Bad News For Bmi

Sat Jan 07, 2006 4:09 am

Maybe this could be a possible way for bmi to simplify its operations? A Capacity Purchase Agreement with this potential european airline. ExpressJet Europe (by Luke Jan 6 2006 in Civil Aviation)
 
Concorde001
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RE: More Bad News For Bmi

Sat Jan 07, 2006 4:44 am

Many analysts have argued for years that a tie-up between VS and BD makes perfect sense. I remeber when in Jan lat year there were rumours of a BD/VS merger, analysts talked of a marriage made in heaven. The deal makes even more sense considering EU-US Open Skies is around the corner - VS will find it incredibly difficult to keep making the $$$ on its US flights when Open Skies brings in competition. In the end it comes down to whether A)Sir Michael Bishop will agree to it, and B) Virgin has the cash.
I think a merger will only be possible after the EU-US Open Skies deals comes into effect. I have a feeling BMI is still pinning its hopes on recovery on the deal which will allow it to operate LHR-USA flights - but I have a feeling BMI will cock it up...as usual!
As for Virgin, teaming up with BD will give it a pool of lucrative LHR slots, allowing it to be real force at LHR and give BA a run for its money. All in all, it will be a win win situation for the consumer and funnily enough BA aswell. There is no doubt in my mind that BA is arguably the best airline in Europe (just look at the investment going in to Club World and the decision in 2000 to put PTVs in economy) because of the competition VS has brought. In comparison, LH doesn't even offer PTVs in economy and AF are not introducing on demand entertainment which BA are.
 
KA501
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RE: More Bad News For Bmi

Sat Jan 07, 2006 5:04 am

Having had the mispleasure to fly with them several times since the change to low cost all I have to say is ''is anyone suprised''?

They are dreadful, I for one now avoid them.
 
BestWestern
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RE: More Bad News For Bmi

Sat Jan 07, 2006 5:30 am

ON RATI this evening.. their CEO is unfazed... its down to the fact that they are focusing on high yield customers.
You are 100 times more likely to catch a cold on a flight than an average person!
 
BDKLEZ
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RE: More Bad News For Bmi

Sat Jan 07, 2006 7:08 am

Quoting Concorde001 (Reply 4):
Many analysts have argued for years that a tie-up between VS and BD makes perfect sense.

I worked for the company for 8 years up until May 2003, and there is nothing that I would like to have seen more in that time than a merger with VS, because it would have meant a marriage made in heaven. BD gets the access they've always craved, to the lucrative and exclusive trans-atlantic market; meanwhile, Virgin inherits 13% of LHR slots and access to an extensive European network.

Things are so much different now. But for other reasons I still do hope that RB not just merges with, but takes control of BD. They've lost their way entirely, and it's because Sir Michael Bishop is a stubborn fool IMO. He sould have agreed a mutual "partnership" of sorts many years ago, instead of insisting on retaining a majority stake in "his" company.

I don't know what his problem is, but what ever it is, he needs to get over it quickly, or it's bad news for all at BD.

Signed,

a sad ex BD'er  crossfingers   crossfingers   crossfingers 
Trespassers will be shot; survivors will be shot again!
 
Concorde001
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RE: More Bad News For Bmi

Sat Jan 07, 2006 7:16 am

I have just realised that LH could become a major player in the fortunes of BMI. If Sir Michael Bishop chooses to exercise his option of forcing LH to buy his controlling stake in the airline we might see LH operating LHR-US flights when Open Skies comes into effect. I think LH might like that - most airlines in the US would love to operate the lucrative LHR-US routes
 
HS748
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RE: More Bad News For Bmi

Sat Jan 07, 2006 7:20 am

Quoting BDKLEZ (Reply 7):
Signed,

a sad ex BD'er

Though you do sound more like a bitter ex-BD'er.
 
BDKLEZ
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RE: More Bad News For Bmi

Sat Jan 07, 2006 7:27 am

Quoting Concorde001 (Reply 8):
I have just realised that LH could become a major player in the fortunes of BMI.

Either way they will do, but the BD/LH agreement will only require LH to buy Sir Michael's stake if LH are still an investor at the time that he decides to sell his stake. LH are free to sell (to VS for example, who have wanted it for many years) that holding in BD if they choose to do so prior to Bishop announcing his intention to sell. This, is what I am led to believe, is what they want they intent to do. To Virgin, I don't know, but they certainly want to "offload" their interest in BD.

 scratchchin   scratchchin   scratchchin 
Trespassers will be shot; survivors will be shot again!
 
BDKLEZ
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RE: More Bad News For Bmi

Sat Jan 07, 2006 7:42 am

Quoting HS748 (Reply 9):
Though you do sound more like a bitter ex-BD'er

Not any more, but I felt somewhat let down by the company when they told me "my position no longer existed", but I still have friends with BD and for them I hope it all goes well whatever happen. As far as BD is concerned, all I can say is that my bosses in every position I ever had, stood me in good stead in my career and gave me the confidence that has enabled to be where I am today.

Perhaps a little bit sentimental, but we use to be a great company and I used to be proud to work with the company; my colleagues and I, who all had a job to do knew how to do our job, and we knew how to do it for the benefit of the passenger who at the end of the day paid our wages!

I'm not bitter any more, I just wish them all the best!  crossfingers 
Trespassers will be shot; survivors will be shot again!
 
Concorde001
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RE: More Bad News For Bmi

Sat Jan 07, 2006 7:47 am

Quoting BDKLEZ (Reply 11):
BDKLEZ

Out of interest what was your role at BD? Did you work in Castle Donnington?
 
BDKLEZ
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RE: More Bad News For Bmi

Sat Jan 07, 2006 7:57 am

Quoting Concorde001 (Reply 12):
Out of interest what was your role at BD?

Reservations Agent, Ticket Agent, Ticketing and Check-in Supervisor, then Airport Duty Manager.

Quoting Concorde001 (Reply 12):
Did you work in Castle Donnington?

I lived there too. And as an afterthought, "Donington" only has 1 "n" in the middle, althought it's a commom mistake to make.
Trespassers will be shot; survivors will be shot again!
 
mhodgson
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RE: More Bad News For Bmi

Sat Jan 07, 2006 7:59 am

Quoting BestWestern (Reply 6):
its down to the fact that they are focusing on high yield customers.

Odd, but because of the withdrawal of business class on most flights, they don't have very many of these any more!
No trees were harmed by this message. However, several million electrons were terribly inconvenienced
 
BDKLEZ
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RE: More Bad News For Bmi

Sat Jan 07, 2006 8:13 am

Quoting Mhodgson (Reply 14):
Odd

Expressed as a personal opinion about the opinion
of another, but suits the current public perception of BD.

Quoting BestWestern (Reply 6):
they are focusing

This is my "selected" text as quoted earlier by Bestwestern as a bit of a joke.
The problem is that they are not focusing. They are trying to run many different business models at the same time and it simply is not working. Sort it out please....
Trespassers will be shot; survivors will be shot again!
 
stirling
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RE: More Bad News For Bmi

Sat Jan 07, 2006 10:18 am

What were the exact reasons BMI turned down the Virgin proposal?

From my neophyte view, it (the merger) appears to be a "No-Brainer"...

I assume BMI is a publicly held company?
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VS11
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RE: More Bad News For Bmi

Sat Jan 07, 2006 12:49 pm

Probably, it is expensive to operate as a low-cost carrier out of LHR. It is mightily expensive to transit via LHR. On the other hand, they could sell a slot or two at LHR, they seem to be going for more than a couple of millions pounds each.

Interesting, if BD and VS merge what the merged airline's name would be. Any thoughts?

Regards,
VS11
 
scotron11
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RE: More Bad News For Bmi

Sat Jan 07, 2006 1:40 pm

Quoting Stirling (Reply 16):

I assume BMI is a publicly held company?

No, it is a private company owned by Sir Michael Bishop. The agreement with LH/SK is that they take the lions share of the losses, hence their desire to dissolve the agreement. Thing is, the way it is structured, no-one really wants to purchase their stakes, VS or otherwise.

I believe the deal still has a couple of years left to run, and includes a provision that SMB can force LH/SK to purchase his majority stake at anytime.

I am sure someone knows the finer details.

Cheers!
 
toltommy
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RE: More Bad News For Bmi

Sat Jan 07, 2006 2:09 pm

Quoting Concorde001 (Reply 8):
we might see LH operating LHR-US flights when Open Skies comes into effect.

In direct competition with alliance partner UA? Very unlikely. If LH were to take control of BD, they could recoup a great deal of the cost buying selling slots off to US carriers who want in. CO and US have the ability to pay for access.

Personally, I'd love to see BD merged into VS. I like seeing an airline outside the current alliance structure have the ability to grow.
 
scotron11
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RE: More Bad News For Bmi

Sat Jan 07, 2006 2:21 pm

Quoting TOLtommy (Reply 19):

Personally, I'd love to see BD merged into VS

Somehow I do not think Branson has the money to do a deal, or VS for that matter.
 
egmcman
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RE: More Bad News For Bmi

Sat Jan 07, 2006 4:30 pm

Quoting Scotron11 (Reply 20):
Personally, I'd love to see BD merged into VS

Somehow I do not think Branson has the money to do a deal, or VS for that matter

SQ has the majority of VS's shares so it is not up to Sir Richard to make such a decision. But agree a merger would make sense.
 
Concorde001
Topic Author
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RE: More Bad News For Bmi

Sat Jan 07, 2006 7:43 pm

Quoting Egmcman (Reply 21):
SQ has the majority of VS's shares

Only 49% actually!
 
EIN145
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RE: More Bad News For Bmi

Sat Jan 07, 2006 7:44 pm

A few of my comments on BMI:

I agree with those who say they lack a clear marketing strategy and this is something they urgently need to focus on.

I'm not sure how they are doing on long haul ops with regard to loads but I have noticed some marketing in Ireland for BD long-haul services. While this makes sense on the BD services from LHR as they can be booked online, BD services from MAN require a connection from DUB-MAN using Luxair and this cannot be booked online. I'm sure they could get some more traffic if problems like this were sorted.

Also there are only so many times a passenger will tolerate out of service check-in kiosks before they look for another carrier. Lately the self-service kiosks in DUB have been out of service a lot or alternatively direct you to the long check-in queue. I have had similar encouinters in LHR inspite always making my booking via flybmi.com

It seems to me that standards of customer service have dropped to low-fare levels but the actual fares offered and operating costs for the airline have not decreased proportionally.
 
BestWestern
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RE: More Bad News For Bmi

Sat Jan 07, 2006 8:17 pm

Quoting BDKLEZ (Reply 15):
This is my "selected" text as quoted earlier by Bestwestern as a bit of a joke.
The problem is that they are not focusing. They are trying to run many different business models at the same time and it simply is not working. Sort it out please....

I know - another lame excuse from their CEO for bad performance... advertising bmibaby to heathrow isn't going after high yield customers
You are 100 times more likely to catch a cold on a flight than an average person!
 
BR942
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RE: More Bad News For Bmi

Sat Jan 07, 2006 8:29 pm

I feel bmi have totally lost their way ,why spend years building up a good reputation as "British Midland" to then change your name to "bmi british midland" THEN before the dust settles on this change drop the british midland and become bmi...as if this was not enough out pops bmibaby. I work for the company and no matter how hard we try , customers and other airlines (including Star Alliance carriers) still call us British Midland.
The public are confused..this is s a typical conversation at a bmi Ticket Counter...
"Do you fly to BHX?"
"No we do not but bmibaby have flights"
"Is that the same thing?
"Not really , but the airline is owned by bmi"
"Where can I get details of bmibaby flights?"
"I can do that here"
"I thought you said you were bmi and not bmibaby"
"Well we are but we can access their system"
OR another example...
"I would like to book a bmibaby flight to LHR"
"bmibaby do not fly to LHR"
"I was on the website and saw flights and fares"
"The flights are operated by bmi but you can buy Tiny fares online"
"What is the difference?"
"Emmmmmm........"
I may sound a little sarcastic but this is the reality of working front-line at the moment and to make matters worse you should try and explain to a passenger with a bmibaby fare traveling on a bmi mainline flight where to check-in bearing in mind the mainline and baby flights have separate desks BUT right next to each other....no wonder the public is confused.
 
KA501
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RE: More Bad News For Bmi

Sat Jan 07, 2006 9:02 pm

Maybe this will create a predictable response from BMI!

They will pull long hauls from Manchester and start new long hauls from Heathrow?
 
flyabunch
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RE: More Bad News For Bmi

Sat Jan 07, 2006 10:13 pm

Just reading the comments of those closer to the situation than I, it would appear that BMI has caught the U.S. legacy carrier disease. The symptoms of that are:

1. No clear direction
2. try charging for things that used to be included (ie. food)
3. shrink business class or seat pitch, or both
4. go off in several directions at once
5. tell everyone that things are fine and you are concentrating on margin, not volume.

I am sorry that this disease has jumped the pond...we really don't need it hear either.

Mike
 
egmcman
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RE: More Bad News For Bmi

Sun Jan 08, 2006 2:12 am

Quoting Concorde001 (Reply 22):
Only 49% actually!

Thanks for correcting me on that, however they will have a large say on a merger perhaps a joint merger if SQ purchased BD and merged BD & VS.

Quoting VS11 (Reply 17):
Probably, it is expensive to operate as a low-cost carrier out of LHR

Yes you are correct they would be low fare airline not a lcc.
 
Capital146
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RE: More Bad News For Bmi

Sun Jan 08, 2006 4:11 am

Quoting Concorde001 (Thread starter):
A spokesman for bmi declined to reveal how many passengers it carried in 2005. He said comparisons with easyJet and FlyBe are unfair 'because they are concentrating on their budget model while we have been growing our long-haul product'.

Nonesense! BD have the same number of A330's now as they did this time last year! They have not grown their long-haul product, but simply moved the emphasis from MAN to LHR.

Quoting Concorde001 (Thread starter):
The figures suggest all is not well at the airline group headed and controlled by industry veteran Sir Michael Bishop, who has long resisted the entreaties of Sir Richard Branson to merge with Virgin Atlantic.

A merger, as I understand, could only take place at Sir Michael Bishop's approval as he owns 50% + 1 share in Bmi, giving him majority control even if LH and SAS did sell out to VS.

Quoting BDKLEZ (Reply 11):
Perhaps a little bit sentimental, but we use to be a great company and I used to be proud to work with the company

BD (as British Midland) were a great company and grew to be a real threat to BA on domestic and European services from LHR during the 1980's and throughout the 1990's. I just think that it's so sad to see the confusion and lack of direction within BD today. Any airline that has as many slots at LHR as BD does should be raking in the money, so what does that say about the current state of the airline when they are still making losses?

Personally, I like the idea of VS taking control (which would require SMB's blessing), but only if domestic services from LHR can be maintained. Too many points in the UK have lost service to LHR in the past 10 years due to slot constraints, the remaining UK cities still served could provide vital feed to a new BD/VS at LHR. The alternative is that most UK regions would simply choose BA or KL (via AMS).
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