Concorde001
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BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Tue Apr 04, 2006 7:44 pm

According to an online business paper, BMI will report pre-tax profits of £10 million this financial year against £2.6 million last year.
Here is how they did it:

Quote:
The airline, Heathrow's second-biggest carrier, said today the disappearance of low-yielding passengers meant it could concentrate on building an operation around higher fare-paying business class travellers.
Concorde001: That is why they removed business class!   


The number of passengers flying bmi and its low-cost sister airline bmibaby stalled at 10.5m last year but increases in yield - the amount it charges per passenger - allowed turnover to grow almost 5% to £869m.


That, plus an 8% cut in costs before rising fuel charges, helped the group to pre-tax profits of £10m against £2.6m in 2004.


However, the future of bmi remains uncertain as its joint-venture partners and major shareholders, Lufthansa and SAS, are demanding a break-up of the current alliance.

Source: http://www.thisismoney.co.uk/news/ar...?in_article_id=408049&in_page_id=2

Well I don't know about you, but I'm surprised! However my question is, as bmi report profts for the whole group (bmi baby), how much of this is attributable to bmi baby's low cost operation and bmi's longhaul ops? I may be wrong, but BMI's profits gives the airline an operating margin of 1.2% - that cannot be good. Could it be the case that bmi is only making money from its longhaul ops from LHR, MAN and its low cost airline bmibaby?
Thought credit where credit is due, so well done bmi for not reporting a loss.

Incidentally, bmi have not published anything on their website, so maybe we will find out more when they do.

[Edited 2006-04-04 12:57:58]
 
mhodgson
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Tue Apr 04, 2006 7:48 pm

While undeniably good for bmi, I am curious to know which divisions are making money - mainline, regional, baby or long haul?
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A340600
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Tue Apr 04, 2006 8:04 pm

How bizarre, as said it will be interesting to see where the goldmine lays,

Sam
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Concorde001
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Tue Apr 04, 2006 8:06 pm

Does anyone know if QR gave bmi some money for the slots being used on LHR-DOH?

[Edited 2006-04-04 13:08:41]
 
BDKLEZ
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Tue Apr 04, 2006 8:07 pm

Also, not being a PLC means that they can publish whatever figures they want. I'm not saying that they're not telling the truth, but there could be a temptation to "cloud" the figures by not specifying what areas of the group are/are not making money.

I suspect WW is the major earner, and perhaps the engineering division through it's third party work.
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BestWestern
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Tue Apr 04, 2006 8:10 pm

Congratulations to Bmi.
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cornish
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Tue Apr 04, 2006 8:11 pm

Well good news for Bmi if achieved through their operational changes.

Of course there is also the possibility that the profts have been helped by one or two exceptional one-time items as well.
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BDKLEZ
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Tue Apr 04, 2006 8:16 pm

Quoting Cornish (Reply 6):
Of course there is also the possibility that the profts have been helped by one or two exceptional one-time items as well.

Indeed, this was also the case for figures published for 2001-2002 which included the sale of British Midland Handling Services and the subsequent merger of Go-Ahead into what has now become Aviance. The BD group made a lot of cash out of that deal (13M IIRC) and was one of only a few airlines to post a profit after Sept. 11th as a result.
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BestWestern
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Tue Apr 04, 2006 8:21 pm

Quoting Cornish (Reply 6):
Of course there is also the possibility that the profts have been helped by one or two exceptional one-time items as well.

I think its down to this also. However, Im just a cynic. Its certainly not down to yields or loads ex heathrow.

Are BD fuel hedged?
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BDKLEZ
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Tue Apr 04, 2006 8:25 pm

Quoting BestWestern (Reply 8):
Are BD fuel hedged?

I believe so, but cannot confirm. It certainly was the case in the past.
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Concorde001
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Wed Apr 05, 2006 2:54 am

BMI have published their results on their website:

STRATEGIC FOCUS DELIVERS PROFIT GROWTH

highlights:

---------------------------------------------------------------------
Turnover
2005: £869.0m
2004: £830.1m
Change: 4.70%
---------------------------------------------------------------------
Operating profit*
2005: £5.5m
2004:(£3.2m)
Change: +£8.7m
---------------------------------------------------------------------
Pre-tax Profit
2005: £10.0m
2004: £2.6m
Change: 284.60%
---------------------------------------------------------------------
Cash
2005: £143.4m
2004: £138.6m
Change: 3.50%
---------------------------------------------------------------------
Debt
2005: (£85.8m)
2004: (£122.3m)
Change: -29.90%
---------------------------------------------------------------------
Passengers boarded
2005: 10.5m
2004: 10.5m
Change: 0
---------------------------------------------------------------------
Aircraft operated as at 31 December
2005: 60
2004: 57
Change: 3
---------------------------------------------------------------------
(RPKs)
2005: 9,325m
2004: 8,775m
Change: 6.30%
---------------------------------------------------------------------
(ASKs)
2005: 13,129m
2004: 12,209m
Change: 7.50%
---------------------------------------------------------------------
Overall Load Factor
2005: 71.00%
2004: 71.90%
Change: - 0.9 points
---------------------------------------------------------------------
Average staff numbers
2005: 4,555
2004: 4,557
Change: static
---------------------------------------------------------------------

* before exceptional items

Commenting on the results, bmi chairman Sir Michael Bishop said: “These figures demonstrate good progress. We beat expectations last year and bmi’s strategic focus created further substantial improvements in 2005. Our concentration on higher yields, better resource allocation and cost control has delivered a good foundation for future growth.”

As you can see, BD only made £5.5 million from actually flying passengers and cargo. The remaining £4.5 million came from somewhere else.

Sir Michael Bishop's review is online if you want to read it: Sir Michael Bishop's Review
I found this part of the statement quite amusing:

Quote:
We have a very clear strategy. In our mainline business we are focusing on quality business-purpose traffic

 rotfl 
 
UAL777UK
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Wed Apr 05, 2006 3:28 am

Well, good on them, i choose them over BA anyday ona competing route in Europe.
 
Humberside
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Wed Apr 05, 2006 4:16 am

Well done to bmi. Some good news for them after recent troubles and criticsm
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StarGoldLHR
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Wed Apr 05, 2006 6:07 am

Quoting BestWestern (Reply 8):
f course there is also the possibility that the profts have been helped by one or two exceptional one-time items as well.

Sale of a few A321's perhaps.
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OzarkD9S
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Wed Apr 05, 2006 6:22 am

Quoting Concorde001 (Thread starter):


However, the future of bmi remains uncertain as its joint-venture partners and major shareholders, Lufthansa and SAS, are demanding a break-up of the current alliance.

This is a rather cryptic statement. Granted I don't keep up too much with BMI, are SK and LH wanting them out of STAR or does this imply something else?
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BDKLEZ
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Wed Apr 05, 2006 6:28 am

Quoting OzarkD9S (Reply 14):
are SK and LH wanting them out of STAR or does this imply something else?

It refers to an agreement signed between BD, SK & LH a number of years ago whereby their "European Co-operation" was consolidated into a deal whereby joint liabilities are distributed equally between the three airlines. Individual profits are to the benefit of all three but individual losses are also absorbed by all three.

Given BD's performance of recent years, I can understand their (SK/LH) train of thought. However, as an ex employee of BD, and as much as their recent form frustrates me, I'm glad that they've had some good news for a change.
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OzarkD9S
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Wed Apr 05, 2006 6:31 am

Quoting BDKLEZ (Reply 15):


It refers to an agreement signed between BD, SK & LH a number of years ago whereby their "European Co-operation" was consolidated into a deal whereby joint liabilities are distributed equally between the three airlines. Individual profits are to the benefit of all three but individual losses are also absorbed by all three.

Thanks for the info BDKLEZ. I wasn't aware of that particular arrangement.
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cainanuk
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Sun Apr 09, 2006 9:42 am

I can assure you that NO other Star Partners want bmi out of Star as bmi own 12% of Heathrow slots. And big or small airline, THAT in and amongst itself is gold. By comparison, VS (whom everyone else thinks is a bigger carrier) own about 1%. BD and their Star Alliance Partners into LHR (AC, UA, LH, SK, and TG especially) get very good value for money on that arrangement.
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BestWestern
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Sun Apr 09, 2006 6:22 pm

BMI profitability is down to slot sales it seems.
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MYT332
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Sun Apr 09, 2006 6:35 pm

Quoting BestWestern (Reply 18):
BMI profitability is down to slot sales it seems.

Where are these slot machines placed? In the galleys or are they at the gate's?
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BestWestern
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RE: BMI Profits UP Despite Pax Drop (I'm Not Joking!)

Sun Apr 09, 2006 9:25 pm

Quoting Myt332 (Reply 19):
Where are these slot machines placed? In the galleys or are they at the gate's?

At the front of the aircraft where the coat area used to be.  Smile
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