Pe@rson
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Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 10:01 am

Lufthansa is struggling to offload discount airline BMIbaby, potentially reducing proceeds from the sale of its entire U.K. business to British Airways parent IAG.

IAG, or International Consolidated Airlines Group SA (IAG), agreed in December to pay 172.5 million pounds ($274 million) for BMI, while negotiating a “significant” discount should Lufthansa fail to find a home for the no-frills operation.

German turnaround specialist Intro Aviation GmbH, which had expressed an interest in BMIbaby, has ended talks, Managing Director Peter Oncken said in a e-mail. Charter carrier ACL has also dropped plans to make a bid

Ryanair, EasyJet, charter carrier Monarch Airlines and Flybe Group Plc (FLYB), Britain’s biggest domestic operator, all said they’re not interested in bidding.

BMI is also continuing with efforts to sell its Aberdeen, Scotland-based Regional division.

Source: http://www.bloomberg.com/news/2012-0...-unit-as-iag-deal-nears-close.html

===

This is, of course, predictable. But I wonder what will eventually transpire. Interesting times indeed.
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simpsondude
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 11:14 am

I may be wrong, but weren't Jet2 looking into BmiBaby?
They operate the same aircraft type and operate out of some of Jet2's established bases
 
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OA260
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 12:01 pm

I think there is a strong chance of them being shut down and their aircraft sold or scrapped. BMI Baby has little value as a brand . Sad but true.
 
Sunfly
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 12:26 pm

Their main problems are many
- They have no real assets, they lease some old 733 aircraft.
- They have higher costs than any of their contemporaries (Including Ryanair, Easyjet, Jet2, Monarch etc etc)
- They have strong competition at all their bases/ cities where they're based.
- Importantly, they lose money each year.
- The brand has no value. It is very confused and doesnt have very strong public recognition.

Lufthansa have really messed up selling both baby and regional. They chose flyforbeans as the prefered bidder, they looked at the books and thought no.

I really hope that they are taken over and the staff are able to keep their jobs, however im not holding my hopes up.
 
BlueShamu330s
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 12:33 pm

Who would honestly want this orphaned baby?

It offers absolutely no value to any other carrier. It's fleet is a generation behind its competitors, its route structure generally overlaps its rivals, so why buy an ailing carrier with an ageing fleet and quite horrendous overheads, when you might just as easily sit back and let it expire?

Not nice reading for Baby's employees, but it's the cold, hard reality of the situation. Even the Fly For Beans rabble ran a mile when they saw the books.

Baby's toast IMO, but hope to be proved wrong.  
So I drive a 4x4. So what?! Tax the a$$ off me for it...oh, you already have... :-(
 
GCT64
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 1:12 pm

In a fully de-regulated market, most competitors (certainly those with existing operations in that market such as Easy, Jet2, Ryanair) can more easily pick off the business they want just by adding some flights on the routes they desire with their existing fleet / staff etc. (Easy could slow the disposal of early A319s, Ryanair similarly with early B738s, Jet2 could add more secondhand 737s). There is no need for them to go through the significant cost and hassle of an acquisition process to do that. I don't believe BMI Baby have any desirable slots (let's remember that the brutal reality was that BMI only had any value because of the LHR slots).

Unfortunately, the best hope for the staff is probably that Easy or Jet2 expand (and recruit) to fill the gap in supply if BMI Baby is closed down (hopefully, for staff and customers sake, any shutdown will be in an orderly manner rather than just overnight).
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r2rho
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 2:48 pm

Quoting GCT64 (Reply 6):

Indeed, after JK's demise Vueling and IB Express hired quite a few of their employees and took over many routes. BMIbaby having absolutely no value as an acquired company, such a shutdown à la JK is probably the best way out. LH cannot expect to gain any money from this operation, it is a lost case.
 
richardw
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 3:57 pm

bmibaby was set up by bmi to spoil the opportunities for Go-Fly when they decided to set up a base at EMA, traditionally one of bmi's home bases.

Since then Go-Fly was taken over by easyJet and Ryanair also set up a base at EMA, easyJet left EMA and Jet2 started flights. bmibaby has not expanded and appears to have high overheads costs because of its lack of scale.
 
kl911
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 5:38 pm

Quoting Pe@rson (Thread starter):
BMI is also continuing with efforts to sell its Aberdeen, Scotland-based Regional division.

What will happen with the Aberdeen - Groningen ( GRQ ) route? Its flown daily on weekdays now because The HQ of NAM, Dutch National Oil Company, and Gasunie, the National Gas company are in or near Groningen.

AFAIK this route is sponsored or even guaranteed by those 2 companies. Will Flybe bid for it?
 
abrown532
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 6:19 pm

I firmly believe that Jet2 will seriously look into an acquisition of BmiBaby, they may get a very good price if Lufthansa cannot find anybody to buy.
 
Humberside
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 6:29 pm

Quoting kl911 (Reply 9):
What will happen with the Aberdeen - Groningen ( GRQ ) route? Its flown daily on weekdays now because The HQ of NAM, Dutch National Oil Company, and Gasunie, the National Gas company are in or near Groningen.

AFAIK this route is sponsored or even guaranteed by those 2 companies. Will Flybe bid for it?

Who knows what will happen to regional yet. But in the event of regional being shut down, ABZ-EBJ/GRQ would be ideal for Eastern Airways
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BlueShamu330s
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 6:31 pm

Quoting abrown532 (Reply 10):

I firmly believe that Jet2 will seriously look into an acquisition of BmiBaby, they may get a very good price if Lufthansa cannot find anybody to buy.

Then you would be firmly wrong; Jet2 have publically announced zero interest in Baby. They did not even look at the books.

Rgds
So I drive a 4x4. So what?! Tax the a$$ off me for it...oh, you already have... :-(
 
abrown532
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 8:02 pm

Quoting blueshamu330s (Reply 12):
Then you would be firmly wrong; Jet2 have publically announced zero interest in Baby.

I stand corrected then.....haha   
 
antonovman
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 8:23 pm

Quoting blueshamu330s (Reply 12):
Then you would be firmly wrong; Jet2 have publically announced zero interest in Baby. They did not even look at the books.

I am not surprised. Jet2 own all their aircraft and BMI baby's aircraft are all leased.
They are too much of a different setup altogether
 
asctty
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 8:25 pm

As a regular user of bmibaby, I would be interested to see who may pick up some of their routes, if not the whole airline. They are the only provider of flights from EMA to EDI/GLA which are of significant business importance to the East Midlands area.
Who might pick these very short haul routes up? Easyjet left EMA and Ryanair have not yet shown any interest. FlyBe perhaps?
They also serve the sunny parts of Europe during the winter months when the other schedules have dries up.
 
gilesdavies
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 8:31 pm

Really sad news, and I always hoped Jet2 would buy them...

But in reality this is highly unlikely, when you look at the cold hard facts!

Like said, the airline virtually has zero assets. All aircraft are leased, they operate into zero slot restrained airports, without even looking at the finances you can tell the airline has struggled, as they have failed to expand over the last 10 years, with constant tinkering of routes/bases and no long term plan to renew the fleet.

If Jet2 decided to expand at BMI Baby's bases, if they closed... They could simply purchase the leases of the old aircraft and recruit the staff that are laid off. This is probably far simpler than having to run two companies side by side and have to integrate them

Even though the brand probably has very little value, would/if any company that purchased BMI Baby, be allowed to keep the name or would they have to change within a certain period? Just curious as at the end of the day, the airline is a subsidiary of the BMI Group and trades off this name, and even if IAG scrap the BMI brand, they ultimately own it.
 
TUGMASTER
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 9:46 pm

Here's a thought....

SRB and his VS empire can have BmiBaby...... + bid on the LHR slots that BA will relenquish, ....

He's should then be a happy bunny.... Has the LHR feed, + a ready made euro network.....

Q.E.D.

rgds
 
Gingersnap
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 11:11 pm

Quoting asctty (Reply 14):
As a regular user of bmibaby, I would be interested to see who may pick up some of their routes, if not the whole airline. They are the only provider of flights from EMA to EDI/GLA which are of significant business importance to the East Midlands area.
Who might pick these very short haul routes up? Easyjet left EMA and Ryanair have not yet shown any interest. FlyBe perhaps?
They also serve the sunny parts of Europe during the winter months when the other schedules have dries up.

I could see LS expanding their services at EMA quite soon after WW's demise. There will be jobs ready for crew that have been laid off, and with type rating in hand it should be an easy fit flight crew also.

LS have a base at GLA, so I could see them linking up GLA & EMA a few times a day no doubt. U2 may come in and pick up the slack, and I'm sure FR will jump on any route that may have looked remotely profitable.
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bennett123
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RE: Lufthansa Struggles To Dump BMIbaby

Tue Apr 17, 2012 11:47 pm

Would the same type rating cover a B737-300 and a B737-800?.
 
adriaticflight
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 12:18 am

Quoting bennett123 (Reply 18):
Would the same type rating cover a B737-300 and a B737-800?.

I don't think so.
 
N1120A
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 9:18 am

Quoting bennett123 (Reply 18):

Would the same type rating cover a B737-300 and a B737-800?.

Yes. Pilots cross over daily between 737 Classics and 737 NGs at many airlines.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
Liverpoola380
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 9:22 am

Quoting TUGMASTER (Reply 16):
SRB and his VS empire can have BmiBaby...... + bid on the LHR slots that BA will relenquish, ....

He's should then be a happy bunny.... Has the LHR feed, + a ready made euro network.....

My thoughts exactly if he bought regional as well he would have even more of a Euro network and as far as I am aware BMI regional is quite profitable !
 
skipness1E
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 9:56 am

The B737 does not have the same type rating as the NG! What airlines do you speak of???

BMI Regional may have been profitable as a BMI airline flying some STAR routes. They would be loss making if all they did was feed LHR on the ERJ-145!

[Edited 2012-04-18 02:58:00]
 
emalad
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 10:21 am

I am really saddened by this news   Out of all the Low cost airlines, I like WW the best! If they leave EMA then this will have a massive impact on the airport.

Quoting TUGMASTER (Reply 16):
Here's a thought....

SRB and his VS empire can have BmiBaby...... + bid on the LHR slots that BA will relinquish, ....

He's should then be a happy bunny.... Has the LHR feed, + a ready made euro network.....



How I would love to see this happen!!!  VIRGINbaby  
 
Pe@rson
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 10:29 am

Quoting emalad (Reply 23):
If they leave EMA then this will have a massive impact on the airport.

To put it into context, EMA has, in the week starting 18th April, 55,183 seats. Of this, FR is the leader with 40% followed by WW with 33%. If WW disappeared and no one else replaced at all, then clearly that would have significant consequences on routes, capacity, and passenger traffic. But in reality someone is likely to replace some routes.

Source: OAG Schedules iNET.
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Boof
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 10:50 am

Quoting skipness1E (Reply 22):
The B737 does not have the same type rating as the NG! What airlines do you speak of???


The worlds biggest 737 operator Southwest do it every day all over the network, so do QF here in Australia. It's a different rating but 737 rated pilots can hold a conversion and fly both.
If only B6 flew in Australia...
 
steman
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 10:55 am

I never really got the rationale behind LH´s involvment with the whole bmi group.
bmi should have been used to feed FRA and MUC from UK/Ireland and northern Europe.
Its LHR slot should have been used to prevent BA from expanding and becoming more of a threat to LH and it´s
FRA operations.
bmiBaby and Regional should have been folded immediately after acquisition and their employees reabsorbed in the
main bmi operations.
The whole airline should have been somehow streamlined and simplified in a sort of LH UK, with an omogeneous but
reduced fleet that would connect main and regional UK/IRL airports to LH´s hubs (FRA, MUC, DUS, ZRH, VIE, BRU).

It might have worked.
Another option, LH should have sold it to Virgin Atlantic and at the same time getting a stake in the new VS/BD group to keep it firmly into the star alliance and use it against BA / oneworld

LH has lost money and the whole bmi affaire and has basically given one of its main competitor the chance to open new long haul routes from Europe´s most wanted airport.

As I said at the beginning, I do not understand the rationale really.
 
richardw
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 11:12 am

Quoting steman (Reply 26):
I never really got the rationale behind LH´s involvment with the whole bmi group.

They've got the additional slots from bmi for LH group at LHR that they wanted, might be an expensive way of getting them though.

LH has added feed to FRA from ABZ and LGW fairly recently.
 
skipness1E
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 11:33 am

Quoting N1120A (Reply 20):
Yes. Pilots cross over daily between 737 Classics and 737 NGs at many airlines.
Quoting Boof (Reply 25):
The worlds biggest 737 operator Southwest do it every day all over the network, so do QF here in Australia. It's a different rating but 737 rated pilots can hold a conversion and fly both.

So just to be clear, the same pilot can fly a B737 in the morning and fly the very different B737NG in the afternoon? I did not know that! I know that in Europe, pilots have to go on a conversion course before flying again.
 
N1120A
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 12:22 pm

Quoting Boof (Reply 25):
It's a different rating but 737 rated pilots can hold a conversion and fly both.

Its not a different rating. Same rating. Differences training is required within any aircraft family, but no "conversion" needed. Now, if the 737NG is not running the 737 Classic-style cockpit software, unless the 737 Classics have been converted to glass cockpits, then a "conversion" is needed.

Quoting skipness1E (Reply 22):
The B737 does not have the same type rating as the NG! What airlines do you speak of???

That is absolutely, 100% wrong.

Quoting skipness1E (Reply 28):
I know that in Europe, pilots have to go on a conversion course before flying again.

Ask Wilco737, a German pilot for a German airline, about that. His 737 type-rating specifically said 300-800 series.

Quoting skipness1E (Reply 28):
So just to be clear, the same pilot can fly a B737 in the morning and fly the very different B737NG in the afternoon?

Yes, and they aren't "very different." Especially if one cockpit is designed/programmed to look like the other. Indeed, pilots can fly the 757 in the morning and the 767 in the afternoon, and those are much more different from each other than 737 Classics are from 737NGs. Same type rating.
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skipness1E
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 12:39 pm

Quoting N1120A (Reply 29):
That is absolutely, 100% wrong.

In which case I humbly apologise. I had thought that the NG had a whole new glass cockpit which would require a new type rating.
 
skipness1E
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 12:42 pm

Quoting skipness1E (Reply 30):
Indeed, pilots can fly the 757 in the morning and the 767 in the afternoon, and those are much more different from each other than 737 Classics are from 737NGs. Same type rating.

Hang on I am getting confused here, the B757/B767 and A330/A340 indeed A319-A340 have near identical flight deck layouts to make cross fleeting as easy as possible. I was under the impression that the NG was a major step up in systems, layout and avionics from the B737-300/400/500. So whereas of course one can have all type ratings on your licence, I thought you couldn't fly a B737-400 in the morning then fly a B737-800 in the afternoon as they were too different to be considered one type rating?

So are we saying any B734 pilot can automatically fly a B738?
 
N1120A
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 12:46 pm

Quoting skipness1E (Reply 30):
I had thought that the NG had a whole new glass cockpit which would require a new type rating.

It does have a glass cockpit. It doesn't, however, require a new rating. Indeed, all 737s are all on the same type certificate (just like the 757 and 767, among other aircraft) and also have the same type rating. Now, substantial enough differences training is required between the older -100 (rare as they are) and -200 and the high bypass fans in the -300 and later that its not usually worth doing all that. However, the -300 and newer are plenty similar. Indeed, the biggest difference, the cockpit gauge layout, is addressed so easily that it takes a laptop and less than an hour to program an NG to read similarly to a steam gauge Classic.

Quoting skipness1E (Reply 30):
In which case I humbly apologise.

No need. This has, however, been well covered on this website for years.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
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SKAirbus
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 1:50 pm

Couldn't buying BMI Baby be a chance for BA to reestablish itself at regional UK airports?

I mean, they could follow the same ideas the new Iberia Express but for the UK.

Whether or not there is a market is another question!
Next Flights: LHR-OSL (738), OSL-CPH (320), CPH-LHR (321), LHR-HEL (359), HEL-LHR (359)
 
skipness1E
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 2:28 pm

Quoting SKAirbus (Reply 33):
Couldn't buying BMI Baby be a chance for BA to reestablish itself at regional UK airports?

Honestly, not going to happen. Regional flying is no longer a BA focus, they're rubbish at it and now they have admitted it and exited the market.
 
jumpjets
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 4:04 pm

Quoting SKAirbus (Reply 33):
Couldn't buying BMI Baby be a chance for BA to reestablish itself at regional UK airports?

One other factor in that equation is that BA has nearly a 15% shareholding in Flybe and also has codeshare arrangements with them. If they really wanted to get back into the regional market [which I think the general consensus is that they don't]I imagine a takeover bid for Flybe would be more likely than trying to breathe some life into BMIbaby.
 
GT4EZY
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RE: Lufthansa Struggles To Dump BMIbaby

Wed Apr 18, 2012 4:34 pm

Easyjet certainly saw the same flight crews operating the 733 and 73G.
Proud to fly from Manchester!
 
emalad
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RE: Lufthansa Struggles To Dump BMIbaby

Thu Apr 19, 2012 9:00 am

Quoting jumpjets (Reply 35):
I imagine a takeover bid for Flybe would be more likely than trying to breathe some life into BMIbaby.

Am not sure how BE taking over WW would work    Personally I can't see BE wanting to fly from EMA when their BHX base is just down the road. I use both airports and I can see there being too much overlap. Although, BE fly betwenn BHD and EMA against WW a couple of times a day.

It will be a shame if and when WW go   I would still like Virgin to buy them and it become VirginBaby. Bet their livery would be brill   
 
vv701
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RE: Lufthansa Struggles To Dump BMIbaby

Thu Apr 19, 2012 9:30 am

I cannot see bmi Baby having any intrinsic value.

It has routes that any interested European airline could start to operate without first purchasing the airline.

It has leased aircraft that any interested airline could lease possibly (in the current economic climate) on more favourable terms than the existing terms.

It does have experienced staff. But if bmi baby goes into liquidation their staff will be available for hire on the open market and the hirerer will be able to avoid employing any it does not need and avoid all redundancy payments to such current employees.

It is a cruel world. But perhaps I am missing something?
 
richardw
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RE: Lufthansa Struggles To Dump BMIbaby

Thu Apr 19, 2012 10:18 am

Quoting VV701 (Reply 38):
I cannot see bmi Baby having any intrinsic value.

not even say 1GBP or 1EURO ?
 
Fabo
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RE: Lufthansa Struggles To Dump BMIbaby

Thu Apr 19, 2012 10:29 am

Quoting skipness1E (Reply 31):
I was under the impression that the NG was a major step up in systems, layout and avionics from the B737-300/400/500.

Not THAT major. Part of it is in fact driven by requirement to keep the pilot rating the same. Look up NG EICAS in tech/ops for an example.

Quoting skipness1E (Reply 31):
So are we saying any B734 pilot can automatically fly a B738?

No, he needs to take a differences ground course. Couple days at most. And then maybe fly a line check. Do that and then you can in fact fly in to hub from outstation on 400 and out again on 800. Many pilots do that, or at least did that while having CL&NG fleets was more common.
The light at the end of tunnel turn out to be a lighted sing saying NO EXIT
 
vv701
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RE: Lufthansa Struggles To Dump BMIbaby

Thu Apr 19, 2012 10:58 am

Quoting richardw (Reply 39):
not even say 1GBP or 1EURO ?

Not even £1 or even a Euro.

Lufthansa Group have acknowledged this, if unintentionally. They have agreed that if bmiBaby is not sold before IAG buy BD then the purchase price paid by IAG will not be a Euro higher. It will be significantly lower. This is because bmiBaby will have a negative value and will be worth considerably less than zero Euros to IAG.

What will be included in the deal if ownership of bmiBaby passes from Lufthansa Group to IAG is far from clear. For example it has been indicated that bmi's debt will not be included in the deal and will remain with Lufthansa Group. But does this apply to bmiBaby's debt?

What about bmiBaby staff's redundancy payments? Clearly if IAG take ownership of bmiBaby this liability will pass to IAG unless Lufthansa Group make all bmiBaby employees redundant before ownership transfer.

What about bmiBaby aircraft lease payments? Again IAG will likely pick up the bill until return-to-lessor terms are agreed. And if these terms include a penalty payment then IAG will have to pay it.

What about other rental payments to, for example, airport operators? Do BA really need the check in desks at EMA? And what will be the cost of cancelling such rental agreements or will IAG be able to sell or give those agreements to a third party or persuade the airport operator to take them back without a penalty payment?

What other hidden debts or costs are there in the bmiBaby accounts or balance sheet? And what, if any, balancing assets belong to bmiBaby?

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