[canucklad]

Being totally selfish. An auction would also suggest the abdication of responsibility for brand BMI by LH. Which in turn means no more Diamond Club. Which means I’m going to lose a shed load of points. Possibly sooner rather than later if gossip is to be believed.

[LuganoPirate]

I think the reply to the FT article from a BM employee is very interesting and highlights Branson’s hypocrisy.

Report BMIchappy | March 13 4:08pm | Permalink
This is somewhat worrying for many of us that are relying on this deal going through to keep our jobs.

Unfortunately, I can’t say I’m surprised, with ‘The Bearded One’ jumping on the band wagon spouting drivel as usual when it suits him. Just remind me who has the monopoly on West coast train services from Scotland then! – Oh, that’d be Virgin, wouldn’t it?

Unfortunately, with the cancer of supposedly low-cost airlines spreading through Europe, small airlines operating from expensive airports such as Heathrow find it very difficult to compete. Sadly, many passengers just aren’t concerned with safety records or service standards – as with so many things, the ‘stack ’em high, sell ’em cheap’ philosophy prevails.

Only by combining with a far larger group can the economies of scale be put to good effect. IAG/BA need the slots that BMI will bring, or they too risk a slow protracted death in the manner of many other legacy carriers. But by gum, we need BA/IAG to get this deal done: Hopefully, I can be part of ‘The World’s Favorite Airline’, and BA will thrive for years to come.

European beauracrats need to stop meddling, and encourage this sort of acquisition, not oppose it!

[canucklad]

I would point out to BMI chappie. Be careful what you wish for! I can’t remember seeing any definate plans or proposals for a post IAG/ BA takeover. In other words what specifacally are BA going to do with their new acquisition to make it.a profitable member of the IAG group? WW didn’t shy away from job losses in his interviews! Still think it comes back to short terminism and the value of tand opportunism of the slots.

[RichHI1]

Krisflyer UA have West Coast early morning arrivals. In my view there is demand for more daytime services from East Coast arriving at night at LHR and conversely early morning flights to US enabling connections far better than the current afternoon arrivals do.

Whilst sympathising with BMI emlpoyees the market can only support the business models that customers will buy into. AA, BA and others have found out the hard way that the percentage of customer base that appreciates quality services and will pay for it is very small. It has historically been boosted by corporate discounting to bring this sector into proftiability. Economies of scale are not really a factor in this unfortunate equation.

Whether BMI employees will do well out of this deal is open for debate. If it goes ahead one should be clear it will be done to benefit IAG Shareholders rather than BMI employees and I suspect the Mixed Fleet debates we have seen will be as nothing as IAG endeavours to cut back on the pension deficit and other employee related issues.

[rferguson]

It will be interesting to see how the BMI crew are amalgamated into BA. A manager I spoke to recently told me that they cannot be put on Mixed Fleet….something to do with TUPE regulations (perhaps someone more versed in such legalities can comment?) .

Rich I can’t really think of many other East Ciast cities whe an early morning departure would work. The JFK morning flight is relatively successful I guess as the traffic between the two cities generates enough point-to-point traffic. But the second morning flight that used to leave JFK, and the morning EWR and IAD departures were all canned years ago. The problem is there is practically zero onward feed….at either end. The flights depart the US too early to have any inbound feed and arrive at LHR too late to provide onward feed. Perhaps if we had a smaller long haul aircraft (757’s or some more A318’s) it could work.

[RichHI1]

rferguson, AA operate morning flights from JFK, ORD and BOS. JFK and ORD have anumber of connections from the West Coast, DFW and Latin America.

BA’s problem is flights are timed for London arrival (e.g. JFK am, GRU, EZE) not departure times or connections in overseas city. This is necessary as the majority of BA customers are UK residents and they prefer an arrival focussed timing.

Obviously the connections will vary by whose hubs they are. I believe UA has a morning from IAD and UA (CO) has a daylkight from EWR. I think Atlanta, Miami, Philadelphia, Detroit and Cleveland all have possible demand with different carriers.

TUPE is the UK implementation of European legislation ailed at protecting the conditions of employees of sold businesses. Given the ETO and insolvency provisions, I think it would be a great mistake to think that this will offer cast iron gur=arantees of anything. I can quite see people being made ot reapply for their jobs which has become a common practice in UK labour relations recently.

[rferguson]

That’s a good point rich, I didn’t think of the feed that could be provided from the overnight Latam flights landing at JFK/ORD early in the AM. So I guess any early departure from the US would only work if a) it was from the east coast to arrive in London before the night curfew kicks in, and b) from an AA hub or very large cities that can provide ample point-point traffic. And I guess as it stands all bases are covered. Both BA and AA have daylights from JFK and BOS. AA had the early morning departure from their hub at ORD which also operates as a BA codeshare flight with ATI. I can’t really think of another city which could make it work. MIA maybe….but not sure if the flight would make it in before the curfew, it’s definitely a longer flight time than ORD.

[pixelmeister]

Re: TUPE and effect on cabin crew, how about the following scenario.

BA would presumably rejig the flying programme, potentially releasing Bmi slots so that they could be used to increase longhaul destinations and frequencies. With two crew pools capable of covering shorthaul (current BA shorthaul plus Bmi) it would make sense to put the bulk of the shorthaul work with whichever was the lower cost base – probably Bmi. Net result, a headcount reduction in the longer serving shorthaul cabin crew, increased longhaul programme covered by taking on more mixed fleet cabin crew. Overall a sizable cost saving exercise. Wins for the Bmi cabin crew who are happy to retain jobs, mixed fleet who see their work variety increasing, and probably passengers who will have happy, motivated cabin crew serving them.

[RichHI1]

I think it will take managemnt skill to integrate BMI as there is a danger of the BMI inclusion further complicated the Mixed Fleet as you potentially have 3 different terms and conditions.

[LeTigre]

Pixelmeister, as economic as your plan might be, sacking a load of short-haul BA staff is likely to bring on another round of strikes. Why not move the ones who want to stay onto long-haul instead of recruiting for mixed fleet?

Regardless, BA will not have time on its hands if BMI survives the next three weeks as it managed to drag one of the largest airline groups, LH, into the red, just imagine what it could do to BA!

[transtraxman]

It is so easy to forget the excellent contributions made by posters on other threads which are highly relevant.

I have taken the liberty to re-post some comments made on other threads which I consider to be extremely relevant to the debate.

1- “Virgin Demands Outright BA/bmi Ban”
(last post 02/03/2012 11:47 GMT )
LuganoPirate – 02/03/2012 04:27 GMT

“Came across this on airliners.net. I’m sure it will make sense to some of you who may like to translate it into laymans lingo!

Airport Coordination Ltd have published their “Start of Season” report for LHR for the Summer 2012 Season.

In terms of slots allocated to the various operators it shows:

Very significant growth in the number of slots allocated to BA – plus 158 weekly slots.

Huge growth in the number of slots allocated to LH – plus 248 slots

Decimation in the number of slots allocated to BD – minus 339.

The numbers of weekly arrival and departure slots allocated at the start of the Summer 2011 and Summer 2012 Seasons for LHR’s largest operators ar:

BA: 2011 – 4,040 ….. 2012 – 4,198 ….. +3.9%
LH: 2011 – 528 …….. 2012 – 776 ……. +47.0%
BD: 2011 – 800 ……..2012 – 461 ………-42.4%
EI: 2011 – 332 ……….2012 – 330 ………..-0.6%
VS: 2011 – 288 ………2012 – 310 ……….+7.6%
SK: 2011 – 286 ………2012 – 272 ……….-4.9%
AA: 2011 – 236 ………2012 – 250 ……….+5.9%
UA: 2011 – 140 ………2012 – 238 ………+70.0%

(Note that CO had 98 weekly slots in 2011, so the “corrected” UA figures are 238 and 238 with no overall change.)

Until the publication of these figures I think most of us had thought that the proposed IAG purchase of BD would include around 700 slots. Clearly it will not. If we add the BA and BD and IB numbers for 2012 – IB being 154 – we get a total of 4,813 weekly slots or 50.5 per cent of the 9,524 available slots. This is a little less than has been quoted by VS and others of around 52 per cent.”

2- “BA after swallowing bmi”
(last post 09/02/2012 15:13 GMT)

GKing92 – 12/01/2012 17:13 GMT

“As it is all quiet on the regulatory front, and while bmi bleeds to death, I thought it timely to look at what might happen after the take over,assuming the 56 slot pairs at LHR are not materially denuded by the regulators.

Some assumptions – nothing can happen before winter 2012 schedules and probably not too much before summer 2013. This fits nicely into BA’s post Olympics planning and the arrival of new 787’s + 380’s in winter 2012. They had planned to retire some capacity after the Olympic fest but presumably can hold on to some capacity on their long haul 767 and 747 fleets to use those newly liberated slots.
While Lufthansa stripped away some routes to its group that it wanted eg Berlin, Zurich and Brussels and abandoned others eg Paris, Amsterdam and Glasgow there remains a rump of routes as less than half the slots overlap with BA’s existing routes

The bmi minibus 319/320 fleet of bmi is very common with BA’s unlike Iberia who have a different engine supplier. So much as when T5 opened there should be an opportunity to shorten turnarounds or tighten timeatbles(both BA and bmi)on around 50 slots a day and at 10 minutes a time thats almost a whole extra plane a day
.
The A332 operation has little obvious overlap excempt in Saudi, and could be better served by BA’s 777, while Amritsar via Almaty looks odd (no local traffic rights) and could be served direct – BA is an airline of choice for the Indian business market, unless Kingfisher survives and wants it for itself, frankly bmi is unknown in India bar its brief excursion into Mumbai for a year or so 3 times a week in c2006. Iberia are taking 8 new 333’s soon so there may be a case to transfer the 332’s if the leases cannot be given back.

The seven ex BMed 320/321 aircraft and assocaited routes look broadly safe and unique,BA declined to bid back in 2008 when bmi paid too much for BMed – given that BA handled the bookings, BA deserve credit for not over paying. Integration again brings an economy of scale that bmi/Star via LHR could not offer.

Where BA and bmi overlap eg Aberdeen,Edinburgh and Manchester there is an obvious chance to put on larger aircraft and reduce combined frequency, liberating perhaps 4, 3 and 2 daily slots respectively.Belfast and Dublin may remain unchanged if they are viewd as viable/feeds.

Otherwise there is a rag bag of random routes – Agadir 3pw each -rationalise or go daily.Basel 3 daily each – rationalise or will some go to Swiss?Nice,Tripoli and Vienna, again a case for tidying and gaining perhaps 1 slot from each route every day..Bergen,Stavanger,and Marakesh, all can stand or fall, or be rationalised with or without Gatwick where BA fly to the latter from.

Which leaves Cairo and Moscow where bmi’s 321 offer looks a little uncompetitive against BA’s long haul equipment. Room to double daily to Cairo with a 777 and a 4th service to Moscow?
All in all perhaps a net 15 slot pairs to be gained…………..

And then where to use them?

Plenty of suggestion on this forum in the past- Fort Laudedale,Caribean, Lima,Goa,Columbo,Phuket,Seoul,Manila and those cities in China that are close to impoosible for the average westerner to pronounce etc. Personaly I would add New Orleans and Memphis 3 times a week each from Gatwick by a 767 liberated by tthe incoming new fleet.

Opportunity of a business lifetime, YES! Let us hope that the planners and development guys at IAG are working overtime to get this show on the road soon, we need the new routes and BA will have the capacity after the Olympics to capitalise on it. Let discussion commece.”

– sparkyflyer – 23/01/2012 14:13 GMT

“There have been other discussions about new BA routes, but with the BMI purchase, new economic climate and other issues this is worthy new thread.

Re BMI A330 -200s which go to Saudi, Freetown & Almaty/Amritsar, if the leasing rates are not so unreasonable they could go to IB. IB I feel have 333/340s which are quite large and maybe not ideal for new or thinner routes. IB have missed having a 767 size plane to ply these routes, so a 332 might be ideal for them.

On the longer BMI routes – Freetown, Addis Ababa, these could easily be justified to keep on, using BA 767s. Freetown could be served in conjunction with Monrovia, which has a good economy, and Addis Ababa could be extended to maybe Kigali or Zanzibar.

About the BMI A320/A321 used on their mid-haul routes, these aircraft are, as mentioned, very similar to BA’s and so should fit in nicely, and I reckon their seating would be a good product for BA to use on their longer European routes for their Club Europe, like Athens, Larnaca, Istanbul etc

There have been many comments on other posts about the current BA CE cabin on the longer routes!

With the economy as it is (not great), I wonder if there is enough demand for some of the leisure routes suggested, but BA Holidays would know this. I imagine with the crazy taxes for flying long haul, that this has impacted demand for caribbean flights etc

So maybe they should focus on business destinations,and countries where their tourists want to come to UK.

I do like the idea of Memphis & New Orleans on LGW based 767s. Maybe Fort Lauderdale would work well with this aircraft.

South America I have mentioned this on other posts – Bogola (now with Lan feed), Lima, also a Lan hub (Air France are pulling out, but they had no local feed), Santiago, Brasilia & Belo Horizonte.

Having BA do these routes may be ideal because IB has a pretty awful reputation and scares a few clients away from IAG.

I believe BA has enough capacity to start these new routes without waiting for 380s and 787s, as 773s come in, short haul 767s are refurbished to long haul etc.

In Africa Libreville is underserved, and could be done as a triangle with Douala. Harare may come back soon, pending on stability there, but this could be done, at least initially, with Lusaka. The Zambian economy is moving well, and KLM and Emirates also starting up there.

Asia

Guangzhou may be tough, as it is a Skyteam hub, but Taipei is happening, and then Vietnam, Phuket, Denpasar, and maybe above all of these in priority, Jakarta.

Many contacts I know there cannot believe there are no direct flights to London, and are peeved at having to change planes all the time.

Going back to lostsomewhere, Amman is probably sufficiently served with RK 330s (and BA codeshare), releasing a slot for other routes.

interesting times, I really wonder if BA has a plan yet!”

These are just some posts to refresh memories which I think should be considered.

[rferguson]

The heat has just been turned up somewhat.

Lufthansa has threatened to shut down BMI entirely if the sale is held up by the EU.

http://www.marketwatch.com/story/lufthansa-may-shut-bmi-if-sale-blocked-2012-03-18

[RichHI1]

So how much is fact and how much bravado. Will they liquidate BMI and lose the slots? Sounds like negotiating ploy to me. Like Pridential threatening to leave UK. Big corporations have become used to getting their own way.

[rferguson]

Well perhaps their modus operandi is valid, although probably a ploy like you say Rich.

Lets all admit it. Similar deals have been done all over Europe. But those airlines did not have Virgin throwing a spanner in the works. If the Virgin element was removed, the deal would probably have been rubber stamped by now. So I guess you can’t blame IAG/LH flexing a bit of muscle. Just need to see how far it will get them…..the threat may also be a bit of a wake up call for some Scottish MP’s who have lodged complaints with the EU about the tie up. Which would be better? The deal….or no BMI….with the loss of Scottish jobs. Puts them in a difficult position.

[flyingformiles]

@transtraxman – I think you only get 50.5% of slots of IAG as LH transferred a number of BMI’s to LH which I assume must be as guarantee for IAG’s £60m investment into BMI to keep it running. I suspect these slots would be transferred back to IAG upon conclusion of the deal to give them the 54% (or whatever it is) that’s being quoted.

As for VS, I read somewhere (sorry can’t find link) that whilst they have x% of slots, they don’t infact use all the slots themselves and lease some out to other airlines.

The reality is that no-one else who comes in for BMI will provide domestic routes or want to! VS could have done so using some of their ‘free’ slots but have chosen that it’s more valuable to get some cash that provide a domestic/short haul service.

[Author]

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