BINDING AGREEMENT FOR BMI PURCHASE

Following the announcement on November 4, 2011, International Airlines Group (IAG) and Deutsche Lufthansa AG (Lufthansa)
have today reached a binding agreement for IAG to acquire British Midland Limited (bmi). The cost is £172.5 million in cash
though the price is subject to significant reductions. bmi consists of three distinct business units - bmi mainline, bmi
regional and bmibaby.

Transaction highlights:

· Acquisition of bmi for £172.5million in cash

· IAG's Heathrow slot portfolio to increase by up to 56 additional daily slot pairs

· Lufthansa to take on bmi's defined benefit pension scheme

· Lufthansa has the option to sell bmi regional and bmibaby before completion

· Significant price reduction if Lufthansa does not opt to sell bmibaby before completion

· Deal subject to competition clearance

· Earnings per share (EPS) accretive by 2014 at the latest

· 2015 operating profit target of E1.5 billion to increase by more than E100 million with consequent increase in EPS

· Underpins goal of 12 per cent return on capital employed by 2015

· Restructuring costs spread over three years and significantly lower in total than bmi's current annual losses

Willie Walsh, IAG chief executive, said: "Buying bmi's mainline business gives IAG a unique opportunity to grow at
Heathrow, one of our key hub airports. Using the slot portfolio more efficiently provides the option to launch new longhaul
routes to key trading nations while supporting our broad domestic and shorthaul network.

"This deal is good news for the UK as we will maintain a comprehensive domestic schedule including Belfast. Our plans to
expand our longhaul network would guarantee growth by making Britain better able to compete on a global scale. It will also
help maximise Heathrow's position as a world class hub airport.

"Customers will benefit from access to new destinations, more convenient schedules, enhanced frequent flyer benefits and
greater investment than had been possible for loss-making bmi.

"Given the scale of bmi's losses, there is an urgent need to restructure the business. Unfortunately, this will mean some
job losses but we will secure a significant number of high quality jobs here in the UK and create similar new jobs in the
future. IAG's purchase of bmi will protect more British jobs than if the airline had been closed and had its Heathrow slots
sold off. There will be restructuring costs spread over three years but these will be significantly lower in total than
bmi's current annual losses.

"bmi regional and bmibaby are not part of our plans and Lufthansa has the option to sell them before completion".

Financing

IAG intends to finance the purchase from its own funds. £60 million of the purchase price will be paid in four instalments
to Lufthansa pre-completion. This amount will be secured by Heathrow slots.

Pensions

Lufthansa has agreed to take on bmi's defined benefit pension scheme.

Timetable and conditions

It is hoped that the transaction will be completed during Q1 2012 subject to regulatory clearance from the European
Commission and other bodies. There is a termination fee of £10 million which is only payable by IAG if phase 1 EU
regulatory approval is not achieved by March 31, 2012 and either party elects to terminate the sales purchase agreement.

About bmi

bmi mainline operates Airbus aircraft to destinations in the domestic UK market, Europe, CIS states, Middle East and Africa
from London Heathrow. bmi regional operates an Embraer fleet and offers shorthaul flights within the UK and Europe from 7
regional airports. bmibaby operates Boeing aircraft and is a low-cost airline flying primarily out of East Midlands and
Birmingham airports.

bmi reported gross assets of £284 million as at December 31, 2010 and a £153 million loss before tax on revenues of £777
million for the year 2010.

ends

December 22, 2011

Oh well I guess VS is out of this battle for BMI and LHR. Now why cant they make LGW or STN a major hub but still maintain a presence at LHR like CO/UA has a major hub at EWR but has a small presence at JFK & LGA.

While my heart would have preferred VS/BD as a combo in *A my head says this was the only realistic outcome. I think VS employees must be breathing a sigh of relief as I am sure that VS would have been broke within a year if they had been the 'successful' bidder. Interesting that LH are going to remain stuck with the pensions, I think that shows more than anything else how desperate they were to get BD off their plate. Now just get it through the regulatory hurdles and get BD out of *A and more importantly out of *A's LHR terminal to make room for someone else to move in.

Just 56 slot pairs at best?
Looks like a whole lot of slots are going to remain with LH and its other brands...
Anybody cares to do the math of what slots are going to be taken out first?

BTW, is that BD's current total slot allocation? or are some being siphoned off in the deal?

Quoting LHR27C (Thread starter): IAG's Heathrow slot portfolio to increase by up to 56 additional daily slot pairs

Very good news for IAG and BMI Staff. IAG really is the best thing for BMI to retain aircraft and and staff.

Quoting lhr380 (Reply 5): Very good news for IAG and BMI Staff. IAG really is the best thing for BMI to retain aircraft and and staff.

I doubt very much whether they will retain many of the aircraft. Understandably I don't think they have any interest in BD itself, just the slots, and I think you will see any of the suitably timed ones being swapped out for longhaul widebody flights rather than wasted on short haul narrowbody ops.

Sad times.

Not happy about this result at all. IAG are only after one thing - slots.


Lee

Great news for IAG and BA. New long-haul routes to emerging markets and no more sacrificing of the domestic and shorthaul network.

It is important to the UK as a whole, the UK economy and the long-term viability of LHR that the airport can offer good connectivity throughout the world but also to the UK regions.

I expect the VS exec's are dreaming up a new slogan to daub on the side of their aircraft as i'm typing.

Let the battle commence....(yawn)

N.B - I see by some posts that BD's failure is already being used as a platform to start knocking BA. How very dreary and predictable....

[Edited 2011-12-22 00:06:35]

just a couple of questions out of this;

Is IAG going to keep the BMI name? or will its ops and aircraft be merged with BA?

I like the fact that they are going to keep a Domestic air schedual for UK  

Whinging from Branson in 3,2,1

Quoting kiwiandrew (Reply 6): I doubt very much whether they will retain many of the aircraft. Understandably I don't think they have any interest in BD itself, just the slots, and I think you will see any of the suitably timed ones being swapped out for longhaul widebody flights rather than wasted on short haul narrowbody ops.

Well, that would make economic sense, wouldn't it. Most BD aircraft are on quite expensive leases, some will probably be retained in order to keep the slots warm until they have been rescheduled. I imagine that the owned aircraft will be retained by BA for longer. This will allow BA to start new longhaul routes, increase some long haul routes and possibly to restore some shorthaul services which have been chipped away at.

"up to 56" slot pairs is quite worrying, I wonder how many more LH group will seek to remove. I would guess that there's a secret lower value at which IAG would pull out of the deal.

It will be interesting to see what happens to DUB, it's good that Belfast is being kept on.

Quoting mikey72 (Reply 8):

Quoting mikey72 (Reply 8): N.B - I see by some posts that BD's failure is already being used as a platform to start knocking BA. How very dreary and predictable....

I presume this statement was intentionally ironic given your 'knocking' of VS?

Quoting iainbhx (Reply 10): Well, that would make economic sense, wouldn't it. Most BD aircraft are on quite expensive leases, some will probably be retained in order to keep the slots warm until they have been rescheduled. I imagine that the owned aircraft will be retained by BA for longer. This will allow BA to start new longhaul routes, increase some long haul routes and possibly to restore some shorthaul services which have been chipped away at.

It definitely makes sense, IAG is a business, not a charity, they will want to get the best return they can on what is, after all, a reasonably major investment. Now I think the important thing is to get the regulatory side of things dealt with as quickly as possible in order to remove as much uncertainty as they can for the staff of BD. While there is no doubt that there will be job losses it is better to have some losses than to have the entire workforce lose their jobs as would otherwise have happened as LH would inevitably have had to pull the plug on BD.

Quoting iainbhx (Reply 10): "up to 56" slot pairs is quite worrying

Well, that's 784 slots per week, so in line with expectation is it not?

Quoting iainbhx (Reply 10): Most BD aircraft are on quite expensive leases, some will probably be retained in order to keep the slots warm until they have been rescheduled.

Keeping 784 slots 'warm' is going to require quite a few aircraft, so I'll assume BA will want to aggressively renegotiate those lease agreements while seeking to backfill - how many remaining A320s does BA have on order for example and I wonder how quickly Airbus would make them available?

It's unfortunate that jobs will be lost, I see no reason to keep on Donnington for example, but for pilots and crews this should be good news (albeit, I know not how their packages compare with BAs, could be better for them?).

Quoting slinky09 (Reply 13): but for pilots and crews this should be good news (albeit, I know not how their packages compare with BAs, could be better for them?).

I think that it will be excellent news for those who get to keep their jobs considering what the alternative would have been if BD had simply folded.

Quoting PanAm707320B (Reply 11): I presume this statement was intentionally ironic given your 'knocking' of VS?

Not at all. The VS bandwagon has already started churning out garbish. Should be quite enjoyable actually.

The airline industry is unfortunately not 'fantasy' driven. Common sense is at a premuim most of the time.

Quoting sabenapilot (Reply 3): Just 56 slot pairs at best?

- 56 per day, that's nothing to sniff at.

Quoting slinky09 (Reply 13): Well, that's 784 slots per week, so in line with expectation is it not?

56 slot pairs is about in line with expectations. It's the "up to" bit, that intrigues me.

Quoting slinky09 (Reply 13): Keeping 784 slots 'warm' is going to require quite a few aircraft, so I'll assume BA will want to aggressively renegotiate those lease agreements while seeking to backfill - how many remaining A320s does BA have on order for example and I wonder how quickly Airbus would make them available? It's unfortunate that jobs will be lost, I see no reason to keep on Donnington for example, but for pilots and crews this should be good news (albeit, I know not how their packages compare with BAs, could be better for them?).

I don't think that BA has many 32x orders left, but I'm sure they can make some fairly quickly.

I am 99% sure that TUPE will apply to this deal, so terms and conditions will remain the same at least in the medium term. This may not be best for the pilots, but I imagine it would be better than being on BA Mixed Fleet for the crews.

I don't have a dog in this fight, being a mainly BHX flyer, I don't use BA very much these days (and I use LH group a lot) and also being a BHX flyer, BD has always been the airline up the road. But I will say that I've had a few flights this year on BHX-FRA operated by BD and I have been extremely pleased with all of them and will miss them on that route.

Quoting ba319-131 (Reply 16): 56 per day, that's nothing to sniff at.

I had a couple of slack days at work in late November and I calculated that BA could keep the Middle East services and Belfast, add a couple to EDI, MAN and ABZ and probably eventually work around their slots to get about 20 new long haul pairs out of it and increase or add a few short-haul pairs.

I think the question is, what happens if LH hive off say 6 more pairs, then the regulators say that 8 pairs must be given to someone for LHR-DUB and 8 pairs for LHR-EDI/MAN competition and 8 pairs to Sir Beard for compensation. Then is the deal viable?

Terrible news. Goodbye *A in the UK, and farewell to one of the best airlines ever to have graced our skies.

From Intranet this morning, BA CEO Keith Williams

IAG has informed the Stock Exchange today that it has reached agreement with Lufthansa to acquire bmi, subject to regulatory clearance.

Bringing bmi into the IAG group would be a great opportunity. It would strengthen Heathrow as a hub despite the absence of a third runway, open new market possibilities and enable us to compete more effectively with other global airline groups.

But it would also be a great challenge. Losses at bmi are substantial and deep-seated.

It is yet to be decided how bmi would be structured within the IAG group. My objective is for bmi to be integrated within British Airways’ operations. However, to achieve this, we must deliver cost and revenue reforms to our existing shorthaul business so that we can create a profitable integrated business.

We hope the regulatory process can be concluded within the next few months. Until we receive regulatory approval, this deal is not completed and bmi remains an independent competitor of British Airways and should be treated as such.

I am confident that if this acquisition goes ahead, it will enhance our group’s business plan, our drive for competitiveness, our plans for growth and our focus on customers.

This is an important development for our group, but we must not allow ourselves to be distracted. Everyone has done a great job in keeping our own business going during the current difficult times. We must continue to keep that focus.

ENDS

I'm no authority on the matter, but does anyone else feel that 172.5m is rather "cheap" for the purchase of an entire airline in general? I know bmi has struggled recently, but still those are some valuable slots at LHR.

Quoting TCASAlert (Reply 19): Terrible news. Goodbye *A in the UK, and farewell to one of the best airlines ever to have graced our skies.

While I am not particularly thrilled about BD disappearing into IAG the truth is that one way or another BD were doomed, they have been bleeding money for a long time now. At least this way, fingers crossed, a lot of their excellent staff will keep their jobs.

[Edited 2011-12-22 00:57:01]

Quoting ChazPilot (Reply 22): I'm no authority on the matter, but does anyone else feel that 172.5m is rather "cheap" for the purchase of an entire airline in general?

Hmmm, not when

Quoting speedmarque (Reply 20): Losses at bmi are substantial and deep-seated.

The integration and synergy exercise will be huge, and frankly the purchase price is BA sharing the synergy with LH. BMI on its own pretty clearly has a negative value.

Interesting that the price actually goes down if LH don't sell off bmibaby prior to completion.

Quoting kiwiandrew (Reply 23): While I am not particularly thrilled about BD disappearing into IAG the truth is that one way or another BD were doomed, they have been bleeding money for a long time now. At least this way, fingers crossed, a lot of their excellent staff will keep their jobs.

True, unfortunately the actions of bad management put the livelihoods of some of the best staff in the industry right on the line.

At least now there is still some future for them, but I can't help but feel that a management clear out and replacement with people who know what they are doing would have been more beneficial

Quoting mikey72 (Reply 15): Quoting PanAm707320B (Reply 11): I presume this statement was intentionally ironic given your 'knocking' of VS? Not at all. The VS bandwagon has already started churning out garbish. Should be quite enjoyable actually. The airline industry is unfortunately not 'fantasy' driven. Common sense is at a premuim most of the time.

Sorry, still not quite following you. Are you suggesting that you'd prefer to see a monopoly in the UK aviation industry rather than healthy competition? Should VS not be able to defend themselves via clever marketing and a solid product to continue to deliver a viable alternative to BA at least for long haul travel?

To continue to criticize VS for sticking up for themselves is something I find bizarre given the comparative size of the two companies. Would you rather they kept quiet and slipped quietly into the annals of aviation history or would you rather they continued to shout and deliver an alternative to both the UK (and global) consumer?

Quoting speedmarque (Reply 20): Until we receive regulatory approval, this deal is not completed and bmi remains an independent competitor of British Airways and should be treated as such.

The media is going to have a field day with this one. The UK general public love the BA/VS feud and Sir Richard Branson is going to pull out ALL the stops with this.

What's he got to lose ? VS will no doubt get a few cast off freebie slots and cease squealing...

Considering the obvious benefits to the UK I don't see how VS can convince OFT or any EU regulatory body given the dominance of LH and AF etc

Quoting BMIFlyer (Reply 7): Sad times. Not happy about this result at all. IAG are only after one thing - slots. At least they will be slots operated by a UK based airline, thus providing UK based employment, a break up of BD would have been worse, at the end of the day what is there left other than slots ? Lee

Quoting TCASAlert (Reply 19): and farewell to one of the best airlines ever to have graced our skies

Unfortunately the paying customers begged to differ.

Quoting ChazPilot (Reply 22): I'm no authority on the matter, but does anyone else feel that 172.5m is rather "cheap" for the purchase of an entire airline in general? I know bmi has struggled recently, but still those are some valuable slots at LHR.

Its not really an airline though, its a crippling pension fund, attached to some expensive aircraft leases.

Quoting PanAm707320B (Reply 26): Sorry, still not quite following you. Are you suggesting that you'd prefer to see a monopoly in the UK aviation industry rather than healthy competition? Should VS not be able to defend themselves via clever marketing and a solid product to continue to deliver a viable alternative to BA at least for long haul travel?

Not at all.

BUT i've said before if VS had their way there would be NO airline alliances, NO Oneworld anti-trust, (NO Oneworld), NO IAG.....

....and LHR would become a totally uncompetitive forgotten backwater. Wonderful.

All so a closely held, small and strategically inept airline can poodle on in its own liitle world. VS and the word 'competition' shouldn't be used in the same sentence.

Quoting PanAm707320B (Reply 26): To continue to criticize VS for sticking up for themselves is something I find bizarre given the comparative size of the two companies. Would you rather they kept quiet and slipped quietly into the annals of aviation history or would you rather they continued to shout and deliver an alternative to both the UK (and global) consumer?

You're flogging a dead horse here and that's not the fault of anyone but VS.

Global ? Competition at LHR is global...that's what you seem to be forgetting.

If you can't stand the heat..........

[Edited 2011-12-22 01:27:52]

Quoting lhr380 (Reply 5): Very good news for IAG and BMI Staff. IAG really is the best thing for BMI to retain aircraft and and staff.

Not good for BMI staff or their loyal customer base at all. Lets not sugar coat this ! Time will prove exactly whats going to happen and you will see what the agenda was.

Quoting BMIFlyer (Reply 7): Sad times. Not happy about this result at all. IAG are only after one thing - slots.

+1 . Very sad day indeed.

Quoting Bongodog1964 (Reply 28): Unfortunately the paying customers begged to differ.

Now, yes, but when BMI had good management, a good network, and a good product, it was the airline of choice for many, and certainly over BA to many European destinations. But that was in the 80s.

Quoting Bongodog1964 (Reply 28): Its not really an airline though, its a crippling pension fund, attached to some expensive aircraft leases.

That, and, 784 slots a week. Gold dust.

I think the problem for those looking at this from overseas is that too many still see the position in the 90s with a plucky Virgin standing up for the consumer and British Midland flying the flag and keeping BA's standards up. The competitive position today is quite different.

Good news for jobs and British aviation, it was a choice between part of something or all of nothing. Branson is a busted flush with nowhere left to go.

Quoting mikey72 (Reply 29): Quoting PanAm707320B (Reply 26): Sorry, still not quite following you. Are you suggesting that you'd prefer to see a monopoly in the UK aviation industry rather than healthy competition? Should VS not be able to defend themselves via clever marketing and a solid product to continue to deliver a viable alternative to BA at least for long haul travel? Not at all. BUT i've said before if VS had their way there would be NO airline alliances, NO Oneworld anti-trust, NO IAG..... ....and LHR would become a totally uncompetitive forgotten backwater. Wonderful. All so a closely held, small and strategically inept airline can poodle on in its own liitle world. Quoting PanAm707320B (Reply 26): To continue to criticize VS for sticking up for themselves is something I find bizarre given the comparative size of the two companies. Would you rather they kept quiet and slipped quietly into the annals of aviation history or would you rather they continued to shout and deliver an alternative to both the UK (and global) consumer? You're flogging a dead horse here and that's not the fault of anyone but VS. If you can't stand the heat..........

So you are suggesting competition is a bad thing. How strange.

Many of your comments from the previous post are puzzling - both from a market and a BA/VS standpoint - , but I think the most invalid is the 'strategically inept' comment. Granted, VS has made many mistakes over the years (show me an airline that hasn't) but looking at the most fundamental level, they have kept flying and offering a choice to BA for over 27 years now when other larger airlines (UK and global) have fallen by the wayside.

From a consumer point of view, competition is ALWAYS a good thing even if you loathe your competitors and what they stand for. It challenges the market to improve their product from every angle and results in an improved experience for the customer.

I respect your opinion but clearly we're looking at the concept of a free market from very opposite ends of the spectrum.

Quoting Bongodog1964 (Reply 28): Unfortunately the paying customers begged to differ.

The sad thing about it is in the last 18 months things began to improve alot in terms of their product and catering onboard. Shame it was too little too late.

Quoting slinky09 (Reply 13): how many remaining A320s does BA have on order for example and I wonder how quickly Airbus would make them available?

They have hardly any left to deliver - according to the Airbus O&D sheet there's one single A320 order outstanding for BA but there's also 2 A319s and 17 A320s for IB and IAG have already orderd planes for one airline and then placed them with the other so I could easily see that happening here.

If they realy needed planes, I'd bet that there's a large airline in India (IT) that would gladly move on some A320s!

So, which slots are plucked by LH then, because I was under the impression BD's portfolio was quite a lot bigger only recently? And what's with the "up to" part of the PR? LH getting the right to a final round of slot stripping first?

Quoting PanAm707320B (Reply 33): So you are suggesting competition is a bad thing. How strange.

Nope, not saying that. How very strange though that you seem to think that VS should be able to curtail BA's efforts to be 'globally' competitive by doing what every other major airline in Europe is doing.

I don't know where you're looking up your definition of 'competition' but I'd try somewhere else !!

I'll leave it there. The deal is done and I havn't got the energy.

Virgin need to butt out - they put forward their table stakes, played the game for a short while, but they got out-played and outbid. I hope that the EU/competition commission recognise that it's IAG or nothing else realistic for bmi now, don't get dragged into any rhetoric or mis-placed idealism from coming Virgin or others with their own self-intested and unrealistic ideas, and approve the acquisition without any onerous conditions that wreck the deal - Lufthansa will just break it up and sell the slots if they're left with it, so whilst emotionally (from a former BD employee) IAG isn't ideal, it's the best of a bad job now.

Andy

The key take out, is that Virgin always want special treatment. They had a brilliant brand and award winning product yet in the last few years BA has powered ahead, even battling against major rivals like Emirates, Qatar and Etihad who weren't even around in the old BA vs Vs days. Add to that KLM and Air France merged to create a more powerful rival with ATI across the Atlantic with NWA and later Delta. Lufthansa helped build STAR into a world leading alliance and was positioning BMI to build a hub at Heathrow. What was Virgin doing? Carping from the sidelines and undermining the BA / AA ATI position as they attempted to get back onto an equal footing with LH / UA and KL / AF / DL.

That is hardly in the interests of the consumer to have our biggest carrier hamstrung against it's major competitors. Why? Heathrow is a special case but FRA and CDG / AMS are in catch up mode. It would be a strategic error not to try and maintain a competitive advantage by staying ahead. If this goes through, Britain will have a stronger BA with a larger network connecting us into the world. If BMI went to VS, they'd only cherry pick some more of BA's best routes. Less choice and more choice all at the same time.

Virgin have been downsizing at LHR as they have come as far as they can with their current business model. They are not at the table with an alliance, consequently they are on the menu. This is their own fault, no one elses.

It's like ordering 10 A330s, realising you won't be able to have Premium seating in the first five, park / lease three, drop two into regional leisure and start the new year off not having announced where the other five will be flying and it the remaining three will be returning. Is this really the sort of fleet planning to save BMI? They're no longer a serious contender, and I say that with some sadness, but that's the position they are in.

Quoting mikey72 (Reply 37): I'll leave it there. The deal is done and I havn't got the energy.

I agree with you there Mikey72 like I intimated in my previous post.

Clearly we disgree entirely with each other on this point so not much use in continuing.

[Edited 2011-12-22 01:59:05]

Personally I wouldn't be suprised if BD's A319's and A320's end up down at LGW. The aircraft could be used to to replace BA's aging 737-400 fleet. The A330's could very well end up becoming part of IB's Longhaul Fleet.

Quoting skipness1E (Reply 39):

  

Every Virgin branded airline around the world survives by slurping off the top cream from the most lucrative markets/routes in any give region that they operate.

It's not competitive...it's borderline parasitic.

Quoting skipness1E (Reply 39): The key take out, is that Virgin always want special treatment. They had a brilliant brand and award winning product yet in the last few years BA has powered ahead, even battling against major rivals like Emirates, Qatar and Etihad who weren't even around in the old BA vs Vs days. Add to that KLM and Air France merged to create a more powerful rival with ATI across the Atlantic with NWA and later Delta. Lufthansa helped build STAR into a world leading alliance and was positioning BMI to build a hub at Heathrow. What was Virgin doing? Carping from the sidelines and undermining the BA / AA ATI position as they attempted to get back onto an equal footing with LH / UA and KL / AF / DL. That is hardly in the interests of the consumer to have our biggest carrier hamstrung against it's major competitors. Why? Heathrow is a special case but FRA and CDG / AMS are in catch up mode. It would be a strategic error not to try and maintain a competitive advantage by staying ahead. If this goes through, Britain will have a stronger BA with a larger network connecting us into the world. If BMI went to VS, they'd only cherry pick some more of BA's best routes. Less choice and more choice all at the same time. Virgin have been downsizing at LHR as they have come as far as they can with their current business model. They are not at the table with an alliance, consequently they are on the menu. This is their own fault, no one elses. It's like ordering 10 A330s, realising you won't be able to have Premium seating in the first five, park / lease three, drop two into regional leisure and start the new year off not having announced where the other five will be flying and it the remaining three will be returning. Is this really the sort of fleet planning to save BMI? They're no longer a serious contender, and I say that with some sadness, but that's the position they are in.

Good post skipness1E - well constructed

Fundamentally, my main beef is with what seems to be continued hostility simply to the fact that VS try to play their hand as best they can (and a lot of this IS through clever marketing and the continued public perception of small guy vs big guy). Clearly, the LGW leisure fleet has slipped in the last few years although this is being rectified in the near-term with comprehensive refits. Y and W class on the A330s are a significant step forward for VS and hopefully these give some pointers to what we can expect in the refits.

I love a good healthy debate to go with my coffee in the morning!

Merry Christmas to you all!

Quoting mikey72 (Reply 29): You're flogging a dead horse here and that's not the fault of anyone but VS. Global ? Competition at LHR is global...that's what you seem to be forgetting. If you can't stand the heat..........

Competition may be global but we still need to protect our own interests above those of foreign competition.

Quoting OA260 (Reply 30): Not good for BMI staff or their loyal customer base at all. Lets not sugar coat this ! Time will prove exactly whats going to happen and you will see what the agenda was.

Agreed. BA are not the "Archangel Gabriel". There is a clear business motive for this, largely eliminating their domestic competition with the convenient side effect of obtaining extra slots. It is the sort of stuff any large company would love to do.

I don't believe staff are as safe as is being made out. For a start ground crew, why keep them on when BA already have the means to cope? Aircraft will be axed along with associated staff (why on earth would they keep 17 flights a day LHR-MAN at largely similar times, 15 flights a day LHR-EDI at similar times etc etc?). Staff will be axed. It won't be pretty.

It's futile to try and incriminate BA for developments unfolding in the global airline industry as a whole.

Quoting TCASAlert (Reply 44): Agreed. BA are not the "Archangel Gabriel". There is a clear business motive for this, largely eliminating their domestic competition with the convenient side effect of obtaining extra slots. It is the sort of stuff any large company would love to do.

Hang on a minute, let me SAVOUR this...

- BD have flunked out down the drain due to bad management.

- LH bought them and made a right old mess of it.

- VS are screaming the proverbial blue muder due to their own ineptness.

- Nobody else but BA is realistically in a position to buy BD and make good use of it.

Somehow though, miraculously BA are the big bad wolf.

I got to hand it to some of you....

  

Quoting TCASAlert (Reply 44): Agreed. BA are not the "Archangel Gabriel". There is a clear business motive for this, largely eliminating their domestic competition with the convenient side effect of obtaining extra slots. It is the sort of stuff any large company would love to do. I don't believe staff are as safe as is being made out. For a start ground crew, why keep them on when BA already have the means to cope? Aircraft will be axed along with associated staff (why on earth would they keep 17 flights a day LHR-MAN at largely similar times, 15 flights a day LHR-EDI at similar times etc etc?). Staff will be axed. It won't be pretty.

They are not eliminating their domestic competition. Their domestic competition is Easyjet and Ryanair. An airline running Embraer-145's on LHR routes is not competition.

Why will BA axe staff with associated aircraft when they need to keep the aircraft to keep the slots warm. Even if BA ordered replacement long-haul and short-haul aircraft today (and I'd guess they would wait until this has been completed) it will be some time before they get them. Why go through redundancy (and that's expensive through TUPE) to have to take on more crew and train them up. Ditto, if you increase your operations significantly, you will need more ground staff. Yes, there will be redunancies, but there will be staff retained, probably more so than any other option.

Quoting mikey72 (Reply 42): Every Virgin branded airline around the world survives by slurping off the top cream from the most lucrative markets/routes in any give region that they operate. It's not competitive...it's borderline parasitic

Finally others are seeing the light! Hopefully the 'cherry-pick and moan' business model is close to collapse

Quoting iainbhx (Reply 46): They are not eliminating their domestic competition. Their domestic competition is Easyjet and Ryanair. An airline running Embraer-145's on LHR routes is not competition.

Of course it is competition. Every passenger that goes to BD is not going to BA, that is competition in my books. And the competition is more than just BD, they are also competing on an alliance level. BD may not have an extensive international network, but their customers connect to multiple *A flights at the moment. BA will see extra custom on their routes as a result as they will be sold as through tickets.

Quoting iainbhx (Reply 46): Why will BA axe staff with associated aircraft when they need to keep the aircraft to keep the slots warm. Even if BA ordered replacement long-haul and short-haul aircraft today (and I'd guess they would wait until this has been completed) it will be some time before they get them. Why go through redundancy (and that's expensive through TUPE) to have to take on more crew and train them up. Ditto, if you increase your operations significantly, you will need more ground staff. Yes, there will be redunancies, but there will be staff retained, probably more so than any other option.

Unfortunately TUPE means nothing these days. They will presumably make their staff sign new contracts, making the TUPE null and void.

Yes there will be more flights but many of those will take place with existing aircraft and crews. Then there are all the back office staff as well, they will not double up on staff.

Quoting mikey72 (Reply 45): Hang on a minute, let me SAVOUR this... - BD have flunked out down the drain due to bad management. - LH bought them and made a right old mess of it. - VS are screaming the proverbial blue muder due to their own ineptness. - Nobody else but BA is realistically in a position to buy BD and make good use of it. Somehow though, miraculously BA are the big bad wolf. I got to hand it to some of you....

You are correct, BA are the best placed airline to buy BD, that I don't disagree with. All I am saying is that this is not a charitable move. BA aren't holding their arms open wide to snuggle up to all the staff that were almost joining the dole queue. This is business and there is a clear motive behind the purchase.

Some people seem to be of the opinion that Willie Walsh the saviour has come to save the world, I'm sorry but that simply is not true. He has bought it as he wants the slots, end of story. The staff will come last.

[Edited 2011-12-22 02:51:21]

Not sure if this has been discussed yet, but if we suppose that everything goes well and the transaction goes through, what could this mean for LHR?

Will BA end up in T5, T3 and T1 (temporarily) and then T5 and T3?

Is T3 able to take this additional load?

Any views?