cf105arrow
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BA/BMI How Likely?

Fri Oct 19, 2007 10:25 am

Thursday October 18, 3:14 am ET


LONDON (Reuters) - The Times newspaper said on Thursday that aviation sources believed British Airways (BA) was in talks with Michael Bishop, the controlling shareholder of bmi, about buying the British carrier.

http://biz.yahoo.com/rb/071018/ba_deals.html?.v=7

Could this eventually happen?
 
LifelinerOne
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 10:45 am

I think these two will be to big at LHR and they will probably have to give up to much slots to make this deal effective. So, no, I don't think these two arch enemies will become one soon.

Cheers!  wave 
Only Those Who Sleep Don't Make Mistakes
 
Rivet42
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 11:13 am

This was discussed yesterday -

Possibility Of A BA/BD/AA Tie Up?
I travel, therefore I am.
 
gilesdavies
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 12:12 pm

Lets hope the day of this happening never appears!

If this happened there would be no British airline competition out of Heathrow, and other an LCC, BA would be the only full service airline left in the UK.

There is enough market for both airlines to compete side-by-side. I would also hope the UK governments Anti Monopoly commission would see sense and block any merger taking place...

A few months ago I was against BMI being taken over by a foreign carrier, but when you see what Lufthansa has done for Swiss, I think they could do the same for BMI... I think BA needs some serious competition on their home patch! Virgin to some extent does provide some competiton on the long haul routes, but picks the cream of the crop on what routes they operate.
 
UAL777UK
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 12:18 pm

Quoting Gilesdavies (Reply 3):
A few months ago I was against BMI being taken over by a foreign carrier, but when you see what Lufthansa has done for Swiss, I think they could do the same for BMI... I think BA needs some serious competition on their home patch! Virgin to some extent does provide some competiton on the long haul routes, but picks the cream of the crop on what routes they operate.

Agreed. I am hoping and praying that LH do come and take over BD or at least increase their stake by acquiring SAS interest. With all thats going on at BD at present with the new BMED routes, the eventual starting of transatlantic routes, that will make them a formidable carrier especially with LH well onboard!
 
UK_Dispatcher
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 12:19 pm

I also would not like to see this happen and would be very surprised if Sir Michael ever sold out to BA.

I would only be in favour of a VS/BD merger/takeover if domestic UK flights such as MME, LBA, EDI, GLA, ABZ etc were maintained but do not think VS would be remotely interested in these.

LH on the other hand might not be a bad idea, but again I would like to see UK Domestic flights maintained.
 
mutu
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 12:27 pm

Quoting Gilesdavies (Reply 3):
A few months ago I was against BMI being taken over by a foreign carrier, but when you see what Lufthansa has done for Swiss, I think they could do the same for BMI... I think BA needs some serious competition on their home patch! Virgin to some extent does provide some competiton on the long haul routes, but picks the cream of the crop on what routes they operate.

Youve mentioned this before but yet the facts suggest there is plenty of competition at LHR and plenty of alternatives to LHR. Post open skies there is less sensitivity about slots. There is in fact very little network overlap BA/BD and other than the scottish "shuttle" there would still be competition. BA manages to be one of the innovative market leaders in product offering particlualrly long haul where many people have since benefitted as other carriers push the bar upwards to follow/catch up and then overtake.
As for the competition authorities, well they will look at the alternatives available (enough); the government would probably welcome domestic and short european fares rising to push people onto trains for environmental politics (!)
But despite this cant see it happening unless it is purely the LHR ops leaving Baby and Regional behind in the hands of SMB.

But putting all of this aside, there is a logic from a purely nationalistic viewpoint: Before long the UK could have 3 longhaul carriers serving LHR, competing with each other and everyone else. With the rest of europe slowly consolidating under AF or LH, who will be the losers ultimately? The UK passenger. If you take the spirit of EU/US open skies, then there are plenty of carriers who can fly ex LHR if they can afford to. Nevermind EU consolidation we seriously need consolidation of the UK mainline carriers to survive
 
sevenair
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 1:53 pm

I would like to see better connections to VS long haul. If they could sell flights (as they already do) on BD under a virgin brand (eg Virgin Connect) I believe this would be great. They could increase the brand awareness in the regions more. Selling though tickets on codeshare flights. Maybe even a few branded aircraft would be cool! This would also take the virgin airline brand in to mainland Europe, where it unfortunately has little impact right now with the demise of the Virgin Express brand.
 
vv701
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 2:44 pm

Quoting LifelinerOne (Reply 1):
I think these two will be to big at LHR and they will probably have to give up to much slots to make this deal effective.



Quoting Gilesdavies (Reply 3):
If this happened there would be no British airline competition out of Heathrow, and other an LCC, BA would be the only full service airline left in the UK.

I am quite sure the British government should and would not let BA take over BD. Having said that it is worth noting that a combined BA and BD with around 56 per cent of LHR slots would be less dominant than AF/KL is at both AMS and CDG or, for example LH is at FRA and SK is at both ARN and CPH. These three airlines have a geographically much larger domestic market. These markets are therefore more reliant internally on air transport than is the case with the UK. But over the years we have seen greater consolidation of the airline industry in these areas than in the UK. AF as a matter of government policy absorbed Air Inter and UTA. LH effectively own Air Dolimiti, Eurowings and Germanwings. SK have bought up and absorbed virtually any locally competitive airline including Braathens, Cimber Air, Linjeflyg, Skyways Express and Wideroe.

Many would dispute the claim that if BA absorbed BD "BA would be the only full service airline left in the UK". Not least of these would be Sir Richard Branson!
 
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FlyCaledonian
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 3:01 pm

Everyone goes on about this would be bad - but BA and BD only duplicate their domestic routes from LHR to EDI, GLA, ABZ and MAN. Not sure how long BD will run the latter given the huge market increase Vurgin Trains is achieving between London and Manchester (BD dropped CDG because it was suffering from BA and AF plus EuroStar). In Europe only the BRU has no other carrier operating, with EI already (or going to) serve DUB and Belfast, and KL serving AMS. Other routes are low frequency.

BA Could say it would dispose of soem slots to another carrier that wished to operate to EDI, GLA, ABZ, BRU from LHR, but this merger would be beneficial. When BD first started challenging BA at LHR in the 1980s - both on demosetci and European flights - it was a very different market from today, with airlines state owned and no Ryanair or easyJet.

BA could also make a guarantee to maintain flights to LBA, INV and JER under a deal, so ringfencing say three/four slot pairs a day to serve these destinations. What it did with the rest would be up to BA.

Plus as others have said, SMB could maybe keep baby and regional as neither would benefit BA.
Let's Go British Caledonian!
 
AIR MALTA
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 7:27 pm

I am hugely surprised that a lot of British A.netters are against this. There is a huge competition going on at LHR at the moment even if BD wasn't around. Look at AF, LH, EK, QR, SQ. Nobody in the UK needs LHR to go to London or to transfer to another destinations. AF, LH and especially KL serve the regions better than BA and BD do together.

If things remain like they are today with 3 British Airlines competing at LHR with all the other airlines and alliances, the losers are gonna be BA and BD. LH could come to the rescue of BD. It could even buy BD and use it to start its own services to the US from LHR. LH wouldn't have any problems getting rid of all those GYD, BAK, ALA,... routes and use the slots to serve the US and reroute passengers to those axed routes through FRA or MUC.

STAR and SKY have a better presence in the UK than OneWorld and BA have in their hubs. If we do not see a consolidation of the British airlines and a 3rd runway at LHR, we could then kiss BA and BD good bye. Our British Airlines wouldn't be able to compete with the like of AF/KL, LH/LX and all other SQ, QR and EK.

I think a BA/BD tie up would create a better UK airline with a stronger base at LHR. The regions would be better served and the spare slots coming from the duplicate routes could be used to increase US flights and expand into Asia and South America if the conditions are good.

I defintely think that there is more to that BA/BD/BMED deal than we think!!!!
Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
 
antonovman
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 10:01 pm

I worked for BMI or BMA as they were then, more than 30 years ago and that runour was going around then. SMB will never sell BMI to anyone, he will own it till the end of his days
 
by738
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RE: BA/BMI How Likely?

Fri Oct 19, 2007 10:18 pm

Quoting Antonovman (Reply 11):
he will own it till the end of his days

You dont honestly believe that, in this current climate. Give it less than 5 years and BMI will have gone to someone be it BA LH or VS.
 
antonovman
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RE: BA/BMI How Likely?

Sat Oct 20, 2007 9:42 am

Quoting BY738 (Reply 12):
You dont honestly believe that, in this current climate. Give it less than 5 years and BMI will have gone to someone

Thats what they said 30 years ago
 
MMEPHX
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RE: BA/BMI How Likely?

Sat Oct 20, 2007 10:42 pm

Quoting UK_Dispatcher (Reply 5):
would only be in favour of a VS/BD merger/takeover if domestic UK flights such as MME, LBA, EDI, GLA, ABZ etc were maintained but do not think VS would be remotely interested in these.

Well if BA did buy BMI then we can kiss goodbye to a lot of those flights. BA's lack of commitment to the regions is legendary. I have to doubt if a BA/BD merger could go through without serious cuts in the LHR slots which then probably wouldn't make much sense to a merger. Now, a LH (or other Star) acquisition would make more sense, give *A a lot more slots, though the UK regional flights might still suffer, lots more access to LHR. This may inadvertently aid any BA/AA tie up,/ATI request as BA/AA could then point to the fairly significant LH/*A presence as a balance to their number of slots.

be interesting to see if there is any truth to these stories and what the final outcome will be.
 
alangirvan
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RE: BA/BMI How Likely?

Sat Oct 20, 2007 11:46 pm

If Air France can announce LHR-LAX under Open Skies, Lufthansa could also do its own flights from UK to USA, if it thinks that makes best use of slots at LHR. LH could have a UK based carrier, which might as well be branded bmi. The Star Alliance is now lacking a presence on LHR-JFK, since United sold the route to Delta, and bmi decided not to start flying there until 2009. Or will the Star Alliance leave LHR-JFK to Singapore Airlines. It would strenghthen bmi if its A330s could be part of an order placed by the Lufthansa group, just like the recent order for Swiss.

Other thought - if Emirates wanted to start a Europe based carrier with ownership structured so that it was a European airline (as Zoom as done with their Zoom UK), bmi would be good airline to place all the EK 777-300ERs, A380s, A350s, 787s if they found that they had ordered more than they could use themselves. BMI to become EmiratesUK?
 
AIR MALTA
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RE: BA/BMI How Likely?

Sun Oct 21, 2007 8:23 am

Quoting Alangirvan (Reply 15):
BMI to become EmiratesUK?

This would defintely be a "Horror" scenario. Don't you think it is time to stop all UK compnies being sold to foreign ones??
Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
 
AlanUK
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RE: BA/BMI How Likely?

Sun Oct 21, 2007 8:49 pm

Quoting Antonovman (Reply 13):
Quoting BY738 (Reply 12):
You dont honestly believe that, in this current climate. Give it less than 5 years and BMI will have gone to someone

Thats what they said 30 years ago

Then bmi will go bust... bmi, just like Virgin, is probably very worried right now... It's a case of GROW or DIE. In the case of Virgin: no alliance, no network, no feeding traffic, and a host of huge groups (AF/KL/DL and BA/AA and UA/LH) that now have access to the gold nest that is LHR...
 
alangirvan
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 1:36 am

Quoting AIR MALTA (Reply 16):
Quoting Alangirvan (Reply 15):
BMI to become EmiratesUK?

This would defintely be a "Horror" scenario. Don't you think it is time to stop all UK compnies being sold to foreign ones??

Where do you start? British Football teams? Car manufacturers? British shipping lines? If BA does go ahead with a merger with AA, just how British will it be ?

If some people think non-British ownership of British based airlines is a horror scenario, will anyone do anything about it? If the Singapore shares in Virgin and other shares in bmi go on the market at a similar time, is there enough British money available to keep them British owned and controlled? If bmi becomes a big airline over the Atlantic, they will want to fund purchase of planes that will replace the A330s. A shame if a British syndicate is left with no money to fund those new planes.

So, would you accept ownership by Nationals from another European country - ie Lufthansa? Lufthansa to appoint the new airline's CEO and expect that the new airline will meet targets? As was said above, this seems to be working for Swiss. I don't think people would want the new airline to just feed Lufthansa long haul services.

Emirates UK? Well, if a small Canadian carrier like Zoom can start a UK subsidiary that meets UK ownership and control requirements, anyone can do it. EmiratesUK, UnitedUK, AeroflotUK. If the UAE has an Open Skies agreement with UK and Emirates can get enough slots to fly the Atlantic from the UK there would be no need for them to start a UK subsidiary. Some British people would probably quite enjoy being able to fly Emirates LHR-JFK, and perhaps they would see nothing wrong with EmiratesUK flying London to Tokyo non-stop. People might be a bit puzzled about flying London to Edinburgh on Emirates UK.

It may be only a few years until these become serious issues. Is there still time for Emirates to get naming rights for the 2012 Olympics?
 
Rivet42
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 4:28 am

What on earth makes you think that Emirates would have any interest in such a venture??? Have they expressed as much, or is this just idle speculation...?

For the record though, I'm not aware of any foreign ownership laws as such in UK, it's merely a matter for individual companies. For example, I understand that BA's Articles of Association prohibit more than 49% of the stock being owned by non-UK entities, but I don't know if BD have any such restriction. Their relationship with LH and SK in terms of stock control may affect who can buy SMB's stake, but I don't know the details.

Frankly, it's quite tedious trying to filter out all the speculative banter from what has been reported as fact by reputable media sources, what people here think may or should happen will have absolutely no bearing on the eventuality.

Riv'
I travel, therefore I am.
 
alangirvan
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 6:57 am

When I mentioned Emirates, yes that was idle speculation on my part. I think it is true bmi and Virgin shares will be on the market sooner or later - we may be having this discussion in 10 years time. Emirates may never be interested in flying between the UK and the USA, though many airline are, and it is fair to say that Emirates is interested in everything. They have been linked with many plans which exist only in some peoples' imagination.

It would be true that an airline has to be owned an controlled in an EC country to take advantage of Europe-USA Open Skies. Emirates or any other foreign carrier could set up an EC based operation - it could do it by taking over bmi, or it might decide that a clean sheet of paper is they way to do it. Multi nationals work in other industries, why would they not work in the airline industry?

Speculative banter is allowed in airliners. No one is saying what should happen. But it takes a long time for the official announcements to come out and people do like to fill in the time.
 
UAL777UK
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 7:57 am

Quoting AlanUK (Reply 17):
Then bmi will go bust... bmi, just like Virgin, is probably very worried right now

Whilst I agree to a degree with VS, I dont think for one minute that bmi is "very worried" as you put it. I think they are making the right decision concentrating on intigrating Bmed into their ops and then go for the US in 2009. You seem to forget that they have a trump up their sleeve in the guise of LH and IMHO its only a mattter of time before they take a very big controlling stake in Bmi and then it will not have to be the VS's of this world that will have to be worried, with the slots they have, the financial clout and management expertise of LH, its BA that will be worried. Everybody is crawling all over their once bullet proof patch...ouch!!
 
AlanUK
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 9:31 am

Quoting UAL777UK (Reply 21):
its BA that will be worried. Everybody is crawling all over their once bullet proof patch...ouch!!

Very good point. I'm sure BA is quietly worried about this new competition. However, it does bare the question: with KLM possibly giving their slots to AF/DL/NW to operate Trans-Atlantic, and bmi possibly going the same way with LH/UA... Which airline is going to bring traffic to LHR from Europe? If LHR allows itself to concentrate so much on the US-Market and most slots are used for UK-US routes, where are all the connecting passengers going to come from? (I'm talking UK and Europe transfers here)...

I still maintain that a BA/BD merger would be a good thing for the interest of UK aviation: it will finally make BA a stronger player against the recent wave of mergers that have created LH/UA, KL/AF (maybe soon to be KL/AF/IB/NW/DL).

BA will have to at least try bmi, if that fails re-try AA, since the market is now "open", the nod from the competition commission should be easier to gain.
 
UAL777UK
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 11:16 am

Quoting AlanUK (Reply 22):
I still maintain that a BA/BD merger would be a good thing for the interest of UK aviation: it will finally make BA a stronger player against the recent wave of mergers that have created LH/UA, KL/AF (maybe soon to be

UK Aviation or for BA??...I think you mean the latter!. Remove competitiion, increase fares etc. I cannot how that helps UK Aviation and indeed the consumer. I hope a deal will never be done, besides even if BA wanted to do a deal, guess who has first rights to the BD stock...yup LH and they will not allow that to go by the wayside IMHO.

And by the way UA/LH have not merged, they are nothing like AF/KLM. Yes they share revenue on routes over the Atalntic but to sasy thats anything like AF/KLM is way off the mark.


BA stated last week they were not in talks with BD and that they wanted to concentrate on getting closer on the dance floor with AA. Time will tell if that takes off again and if so at what cost.
 
scotron11
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 11:37 am

Quoting AlanUK (Reply 22):

Very good point. I'm sure BA is quietly worried about this new competition.

To a certain extent. If their goal is closer ties with AA, then all this competition helps. BA have a very strong base at LHR, which will be a lot better when T5 opens. Coupled with reports that they are planning direct EU-US flights, it seems BA is being the most aggressive.
 
AIR MALTA
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 1:36 pm

Quoting UAL777UK (Reply 23):
Remove competitiion, increase fares etc.

How can be the competition removed if BA swallows BD? They hardly have overlapping routes.



Quoting AlanUK (Reply 22):
I still maintain that a BA/BD merger would be a good thing for the interest of UK aviation: it will finally make BA a stronger player against the recent wave of mergers that have created LH/UA, KL/AF (maybe soon to be KL/AF/IB/NW/DL).

You're right. We need consolidation in the UK. BA badly needs BD. Look how BA can not add new routes at LHR with switching routes to LGW. That happened to WAW lately. BA needs some more slots and it is at a big disadvantage at its how base compared to LH and AF. If BA swallows BD, overlappimg routes would be reduced and some more routes would be opened at LHR and we might some other routes transferred back from LGW, like WAW, LUX or VCE. If the 3rd runway is not built and BA does not take over, I can hardly see how BA would survive with such a poor and congested hub that is LHR. I am really surprised that a lot of UK fellows do not see that!
Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
 
JoFMO
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 1:39 pm

Quoting UAL777UK (Reply 23):
UK Aviation or for BA??...I think you mean the latter!. Remove competitiion, increase fares etc. I cannot how that helps UK Aviation and indeed the consumer. I hope a deal will never be done, besides even if BA wanted to do a deal, guess who has first rights to the BD stock...yup LH and they will not allow that to go by the wayside IMHO.

But there is always the possibility of a dirty deal between BA and LH. I give you BMI and you give me IB. Would be very favorable for both parties (except the consumers certainly).
 
UAL777UK
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 3:13 pm

Quoting AIR MALTA (Reply 25):
How can be the competition removed if BA swallows BD? They hardly have overlapping routes.

Domestically to start with, AMS, BRU, pretty much whereever BD fly out of from LHR, BA also flies there so to say there is no overlap is a bit wide of the mark in my opinion.
 
Rivet42
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 3:22 pm

Quoting AIR MALTA (Reply 25):
I am really surprised that a lot of UK fellows do not see that!

... maybe that's because we know what the reality is and you don't???

Fact: a BA takeover of BD will not be allowed, even if BA were interested, and I can assure you that they have more important things to think about. Don't forget that when T5 opens they will be in a very strong and dominant position at LHR, having almost all (unfortunately not quite all) of their routes connecting through the same terminal for the first time, and hopefully a state-of-the-art terminal at that.

Are they worried about AF, LH etc operating to US from LHR? No. The BA market share LHR-JFK is based around frequency throughout the day, and if you add AA into that pattern (with post-Open Skis ATI), no-one else has any hope of getting anywhere close.

And don't forget that AF, KL & LH are not going to sacrifice very many of their LHR slots for LON-USA operations, they have far more money to make providing people with connections through their own hubs. Any threat to BA will be from AF offering connections through CDG, KL through AMS and LH through FRA, not through LHR. It's very easy to lose site of that in the smokescreen of the Heathrow slot mania.

Riv'
I travel, therefore I am.
 
avek00
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 9:47 pm

Quoting Rivet42 (Reply 28):
Fact: a BA takeover of BD will not be allowed

Very wishful thinking on the part of anyone.

For starters, with BD's continued intra-Europe cutbacks, the carrier competes less and less with BA with each passing day, likely to the point where a forced divestiture of LHR slots would be of a workable magnitude for the carriers. Second, regulators have almost always been far more concerned about market domination on specific city pairs as opposed to overall size at a given airport -- just being a large player doesn't block anything in and of itself.
Live life to the fullest.
 
Rivet42
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RE: BA/BMI How Likely?

Mon Oct 22, 2007 11:38 pm

Quoting Avek00 (Reply 29):
For starters, with BD's continued intra-Europe cutbacks, the carrier competes less and less with BA with each passing day, likely to the point where a forced divestiture of LHR slots would be of a workable magnitude for the carriers.

Funnily enough, according to Airport Coordination Ltd (ACL - London's slot allocation body) data, in summer 2007 BD had an average 1079 runway movements per week up 2% on 2006. That's approx 11.4% of total movements, and unless they shed a very significant proportion of those slots, there is no way that the UK's competition authority would allow BA to acquire BD in its current shape. (BA has 40.6% of all movements on average by week.)

But my point was actually that BA has no interest in BD, and I've yet to see or hear of any evidence to suggest otherwise.

Riv'
I travel, therefore I am.
 
JoFMO
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RE: BA/BMI How Likely?

Tue Oct 23, 2007 6:14 am

Quoting Rivet42 (Reply 28):
Are they worried about AF, LH etc operating to US from LHR? No. The BA market share LHR-JFK is based around frequency throughout the day, and if you add AA into that pattern (with post-Open Skis ATI), no-one else has any hope of getting anywhere close.

That is why I still thing that they would have to give up some NYC-LON slots to get ATI.
 
commavia
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RE: BA/BMI How Likely?

Tue Oct 23, 2007 6:36 am

While I'm not sure how likely it is, I'd be thrilled if BA took over bmi - I've been hoping for that (and have said as much here on A.net) for a while. While I understand competition concerns, I think the reality remains that Heathrow, and most definitely the greater London metro area, is immensely competitive - perhaps the most competitive market of its size anywhere in the world outside, perhaps, the U.S. Between BA, easyJet, Ryanair, Air Berlin, etc., etc., it is hardly difficult to find cheap flights from London to just about anywhere in Europe (i.e., the markets where BA and bmi mostly overlap). I think consolidating BA and bmi would give BA the competitive strength to combat growing threats from continental competitors (particular AF-KL, and LH) into its territories. As others have said, the fact remains that BA maintains a far, far smaller share of its home market than any other continental airline, and there is virtually no other airline on earth that maintains its home base and largest hub at an airport even half as congested and capacity-restricted as Heathrow.

As I said, I have no idea of the chances, but I hope it happens.
 
AIR MALTA
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RE: BA/BMI How Likely?

Tue Oct 23, 2007 7:57 am

Quoting Commavia (Reply 32):
As others have said, the fact remains that BA maintains a far, far smaller share of its home market than any other continental airline, and there is virtually no other airline on earth that maintains its home base and largest hub at an airport even half as congested and capacity-restricted as Heathrow.

At least somebody got it right.


Quoting Commavia (Reply 32):
I think consolidating BA and bmi would give BA the competitive strength to combat growing threats from continental competitors (particular AF-KL, and LH) into its territories.

This is what I meant when I said that a BA/BD tie up would be a great idea. We need a strong BA to compete with the likes of LH and KL. And unless a miracle happens and a third runway is built overnight at LHR, BA won't be able to expand unless it gets some slots from somewhere. Look what happened with IAH and DFW flights. They were transferred to LHR along ALG. WAW had to be switched to LGW. I don't see any airline in Europe having to do all of this to add some routes at its main hub. Because of LHR's congestion, BA had to axe a lot of important routes and deploy aircraft on routes where it could generate better revenues. Ideally, BA would want to move everything to LHR to be a viable alternative to AF and LH.

Quoting Commavia (Reply 32):
While I'm not sure how likely it is, I'd be thrilled if BA took over bmi - I've been hoping for that (and have said as much here on A.net) for a while.

I would be also thrilled to see that happening. LH and AF are getting too dominant in Europe. It is time for BA to regain its position that is N1.
Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
 
avek00
Posts: 3166
Joined: Mon Oct 25, 2004 5:56 am

RE: BA/BMI How Likely?

Tue Oct 23, 2007 12:02 pm

Quoting Rivet42 (Reply 30):
Funnily enough, according to Airport Coordination Ltd (ACL - London's slot allocation body) data, in summer 2007 BD had an average 1079 runway movements per week up 2% on 2006. That's approx 11.4% of total movements, and unless they shed a very significant proportion of those slots, there is no way that the UK's competition authority would allow BA to acquire BD in its current shape. (BA has 40.6% of all movements on average by week.)

Your own numbers suggest that BA/BD would control just 52% of all movements at Heathrow -- on a percentage basis, BA/BD would control fewer flights at LHR than AF does at CDG, LH at FRA, or KL at AMS. Considering further that BD has abandoned flights to various key intra-Europe ex-LHR markets (such as the German cities and CDG), the regulators would be downright stupid to disallow a BA/BD merger, and the UK would then rightfully deserve the sh!tshow aviation sector that will likely result soon absent changes to the current operating paradigm.
Live life to the fullest.
 
JoFMO
Posts: 1840
Joined: Wed Jul 14, 2004 1:55 am

RE: BA/BMI How Likely?

Tue Oct 23, 2007 12:48 pm

Quoting Avek00 (Reply 34):
Your own numbers suggest that BA/BD would control just 52% of all movements at Heathrow -- on a percentage basis, BA/BD would control fewer flights at LHR than AF does at CDG, LH at FRA, or KL at AMS. Considering further that BD has abandoned flights to various key intra-Europe ex-LHR markets (such as the German cities and CDG), the regulators would be downright stupid to disallow a BA/BD merger, and the UK would then rightfully deserve the sh!tshow aviation sector that will likely result soon absent changes to the current operating paradigm.

You can't compare LHR with either CDG, AMS or FRA. There significant differences. LHR is a closed market with no slots for anybody to grow.
AMS is wide open. Everybody could come in who wants to.
CDG is relatively open. With minor restrictions everybody who wants can start/expand CDG.
FRA is relatively closed. But FRA is an artificial hub not supported by a big city like Paris or London. Therefore having 90% of the slots there does not give you as much of an advantage as having 40% in LHR.
 
scotron11
Posts: 1191
Joined: Tue Feb 10, 2004 4:54 pm

RE: BA/BMI How Likely?

Tue Oct 23, 2007 12:50 pm

Quoting Avek00 (Reply 34):

Your own numbers suggest that BA/BD would control just 52% of all movements at Heathrow -- on a percentage basis, BA/BD would control fewer flights at LHR than AF does at CDG, LH at FRA, or KL at AMS. Considering further that BD has abandoned flights to various key intra-Europe ex-LHR markets (such as the German cities and CDG), the regulators would be downright stupid to disallow a BA/BD merger, and the UK would then rightfully deserve the sh!tshow aviation sector that will likely result soon absent changes to the current operating paradigm.
 checkmark 

The word "creep" comes to mind. A few years ago AF was a bit of a basket case and LH wasn't even on the radar. Look at them now. BA at one time was making all the running: negotiations with KL, 25% ownership of QF, a huge investment in US, ownership of DBA. They have since gotten rid of all that, and apart from the ongoing saga with IB, all they have is T5.

All they need now is LH to exercise their option with BD and where are they then??
 
AIR MALTA
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RE: BA/BMI How Likely?

Tue Oct 23, 2007 1:15 pm

Quoting JoFMO (Reply 35):
You can't compare LHR with either CDG, AMS or FRA. There significant differences. LHR is a closed market with no slots for anybody to grow.

A lot of airlines are groing at LHR. EK serves LHR 5 times daily. DL, NW and CO are going to start operating out of LHR.
IF BD decides to go ahead with its tatl routes, expect Leeds, Jersey and Teeside to be axed from LHR. May be BRU and AMS also. Then you'll have less regions connected to LHR and only BA as a UK airline on routes to European Business centers.
Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
 
JoFMO
Posts: 1840
Joined: Wed Jul 14, 2004 1:55 am

RE: BA/BMI How Likely?

Tue Oct 23, 2007 1:19 pm

Quoting AIR MALTA (Reply 37):
Then you'll have less regions connected to LHR and only BA as a UK airline on routes to European Business centers.

So if you consider that as bad why make it even worse by proposing BM+BA?

Under this scenario not only MAS, BRU and JER might go, but also ABZ, EDI, GLA, MAN, MME, LBA, BDH, DUB.
 
Rivet42
Posts: 604
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RE: BA/BMI How Likely?

Tue Oct 23, 2007 1:21 pm

It's interesting how some appear to think that the role of the competition authorities is to safeguard the prosperity of one company or another. My understanding of their role is to protect the competitiveness of the marketplace from the consumers' point of view, which is rather a different task.

Now I would always argue that in terms of home-base slots, BA is at a disadvantage to AF, LH, KL and SK, and they have no right to complain about BA's dominance on US routes as a result, but that is outside the scope of the UK competition authorities (it is a matter for the EU, who being traditionally skewed towards the interests of France & Germany would not necessarily see any problem there).

The view that will be taken is whether a combined BA/BD offers the consumer more choice, the same choice, or less choice in the short term, without speculating what might happen in the future as a result of this or other consolidation in the market. And it's not simply a question of the choice available to Londoners - clearly that will not necessarily change, as we already have a healthy choice of 4 airports, with connections via one or another to every corner of the world. Regardless of one's view of the role of individual airports and airlines, frilly or no-frills, the historical fact is that Heathrow is the UK's primary air gateway to the rest of the world, and domestic services into Heathrow are extremely important for most regional centres, offering destinations that are not physically or economically viable from smaller airports. And it is the competitiveness of that connectivity that is at stake, as I tried to illustrate with an earlier example of Scotland. Of course, a passenger from say, Edinburgh, has the option to fly directly to Paris, or Amsterdam, and connect there for worldwide destinations, but inevitably such feeder routes will be less frequent than those into London, due to the domestic business market, so they are not really part of the central issue. The point I was making earlier was that from Edinburgh, in terms of the UK aviation market (the remit of the UK competition authority), currently a Scottish passenger has the full alliance network choice of Star through LHR with BD, or oneWorld with BA. If you combine BA & BD then they are left with only the one choice - oneWorld. Which ever way you look at it, that is a direct and immediate reduction in consumer choice.

Who knows, maybe a remaining Star partner might step back into the Scotland-Heathrow market and redress the balance, but such speculation is just that, speculation, and not grounds for consideration by the competition authorities. They can only look at the direct change in choice to the consumer as a result of such a merger/takeover, and it will clearly be less.

Riv'
I travel, therefore I am.
 
AlanUK
Posts: 511
Joined: Thu Oct 07, 2004 2:56 am

RE: BA/BMI How Likely?

Tue Oct 23, 2007 10:58 pm

Quoting Rivet42 (Reply 28):
Fact: a BA takeover of BD will not be allowed

Dictionary definition of fact: fact (n.) a statement or assertion of verified information about something that is the case or has happened : "he supported his argument with an impressive array of facts"

So where is the verified information that says that BA and BD will not be allowed? I respect a lot of things you have said in this threat, but on this line, you're talking rubbish. If there was indeed no way a BA/DB deal would be allowed, the newspapers would not even be talking about it, especially not The Financial Times or The Times.

Quoting JoFMO (Reply 35):
FRA is relatively closed. But FRA is an artificial hub not supported by a big city like Paris or London.

Holly c**p! I don't think citizens of Frankfurt would be very happy with your comments:

Quoted from Ask.com:
"Frankfurt [pop. 3,720,000] lies in central Germany in the state of Hessen. Its official name 'Frankfurt am Main' refers to the fact that the Main River runs through the city. The city is Germany's financial and commercial capital and has enormous economic power not just within Germany but also within Europe. Some of Europe's highest skyscrapers are to be found here, with many government organizations, the publishing industry and bank headquarters choosing Frankfurt as their home. Trade has made the city very cosmopolitan and multi cultural, with non-Germans making up over twenty-five percent of Frankfurt's population.

Frankfurt is a vital air, road and rail network juncture due to its central position within Europe. The city attracts approximately twelve million visitors per year with many of these being drawn by the numerous exhibitions, trade fairs and congresses. For some excellent shopping opportunities in go to Zeil, Frankfurt's ritzy pedestrian thoroughfare and Germany's busiest shopping district. "

Quoting Avek00 (Reply 34):
Your own numbers suggest that BA/BD would control just 52% of all movements at Heathrow -- on a percentage basis, BA/BD would control fewer flights at LHR than AF does at CDG, LH at FRA, or KL at AMS. Considering further that BD has abandoned flights to various key intra-Europe ex-LHR markets (such as the German cities and CDG), the regulators would be downright stupid to disallow a BA/BD merger

Thank you! Someone with perhaps more of a global vision from across the pond!
 
jfk777
Posts: 5954
Joined: Tue Aug 22, 2006 7:23 am

RE: BA/BMI How Likely?

Wed Oct 24, 2007 2:48 pm

BA and BMI would never happen for many reasons first being 53% of LHR's slots. CDG, FRA & AMS are apples and oranges since the world flies to LHR before it flies the other capitals of Europe. LHR is like NRT and JFK not another European hub, for several reasons but mostly historic and cultural ones. EMPIRE and The ENGLISH language; the British Empire has territorries all over the world and from all those lands the 744, 777, A330 and A340 fly to LHR. LHR has more service from North America, Asia, Japan, South Africa, India Austalia and New Zealand then any other European city. South America is the only exception to this since for cultural reasons they go mostly to Spain.

The USA to UK market is 40% of the USA to Europe market. Germany is second with 20 % & France has 10%. JFK to LHR ALONE is 10% of the ENTIRE market; so that city pair alone is one quarter of the USA to UK market. LHR is the most desired airport of 40% of the whole market. FRA and CDG have respectable connections by their national airlines nut those two Lufthansa and Air Franxw still fly many daily frequencies to JFK too.
 
Rivet42
Posts: 604
Joined: Mon Aug 08, 2005 11:26 am

RE: BA/BMI How Likely?

Wed Oct 24, 2007 9:08 pm

Further to the figures I quoted above, from the Airport Coordination Ltd website, I have run a quick analysis on actual slot use at LHR for the first week of September, breaking it down by alliance...

47.3% - oneWorld
27.6% - Star Alliance
6.8% - SkyTeam

18.3% - everyone else

If the BD slots as they currently are become merged into oneWorld, then the figues would become

59.5% - oneWorld
15.5% - Star Alliance

which, whilst not matching the bias at other major European hubs, would represent a very significant change to the existing balance, and that would definitely give the UK competition authorities cause for concern, not to mention the key players in Star Alliance, LH and SK, who would almost certainly exercise their influence over BD to prevent such a deal.

Riv'
I travel, therefore I am.
 
avek00
Posts: 3166
Joined: Mon Oct 25, 2004 5:56 am

RE: BA/BMI How Likely?

Wed Oct 24, 2007 9:52 pm

Quoting JoFMO (Reply 35):
You can't compare LHR with either CDG, AMS or FRA.

OK, then compare it with the large -- and largely constrained -- hub airports in North America. A BA/BD would still possess a smaller market share than virtually all US legacy hub airports except perhaps LAX, SFO, and ORD.

Quoting Jfk777 (Reply 41):
BA and BMI would never happen for many reasons first being 53% of LHR's slots

Last time I checked, UK and USA regulators tend not to focus on city concentration generally but rather on the market share concentration on SPECIFIC routes. Possessing 53% of LHR's slots means nothing in and of itself --- the question is the extent to which BA and BD have route overlap, whether a merged carrier can use its dominance on those overlap routes to engage in anti-consumer practices, and whether new entrants can compete against the merged carrier on those same routes.
Live life to the fullest.
 
adicool
Posts: 169
Joined: Tue Apr 10, 2007 8:38 am

RE: BA/BMI How Likely?

Thu Oct 25, 2007 8:32 am

How many slots does LH/LX have right now and how many would they have if they were to buy BD?
LH is probably dying to get its hands on the JFK-LHR service...also a big hole in the *A-network.
 
JoFMO
Posts: 1840
Joined: Wed Jul 14, 2004 1:55 am

RE: BA/BMI How Likely?

Thu Oct 25, 2007 11:22 am

Quoting Avek00 (Reply 43):
Quoting JoFMO (Reply 35):
You can't compare LHR with either CDG, AMS or FRA.

OK, then compare it with the large -- and largely constrained -- hub airports in North America. A BA/BD would still possess a smaller market share than virtually all US legacy hub airports except perhaps LAX, SFO, and ORD.

LAX, SFO, ORD are a good star. Add other major world class cities as JFK, NRT. No hub airlines is very dominant in thnis kind of cities.
FRA plays more in the league of 'artificial' hubs as ATL, DTW. Airlines fly there not because of any huge o&d but because they are hubs with numerous connection possibilities.
CDG is little bit different, a major world class city but still very much dominated by its local hub airline. So why should LHR become another exemption rather than stick to the norm?

LHR will more and more become an O&D airport. Airlines can't afford to waste valuable seats with connecting passengers. When BA want to have a mega hub to connect passengers from all over Europe, then they have to look somewhere else. LHR is not the right place for that. Same as JFK or NRT.
 
JoFMO
Posts: 1840
Joined: Wed Jul 14, 2004 1:55 am

RE: BA/BMI How Likely?

Thu Oct 25, 2007 12:39 pm

There are also some interesting comments from LH's CEO and their financial chief made at their quarterly presentation. They said that they are prepared for a majority takeover of BMI and have already put aside money in their financial planning for the coming years.
 
PVDCMHOZ
Posts: 31
Joined: Tue Jan 03, 2006 2:24 am

RE: BA/BMI How Likely?

Thu Oct 25, 2007 6:26 pm

Maybe this is the begining of a "new" BOAC and BEA? BA will operate a longhaul network from LHR and BD will operate domestic and EU flights as a different company ala AF KL? Does anyone else think history is going to repeat itself?

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