bmi Suffers Further Route Closures

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This topic contains 18 replies, has 8 voices, and was last updated by  VintageKrug 17 Sep 2009
at 21:34
.

Viewing 15 posts - 1 through 15 (of 19 total)

  • Anonymous

    VintageKrug
    Participant

    The link to Venice will be particularly missed:

    Between London Heathrow and Palma 3 November 2009

    Between London Heathrow and Venice 15 November 2009

    Between Manchester and Glasgow 18 September 2009

    Between East Midlands and Cologne 18 September 2009

    What happens to bmi when Lufthansa finally find a buyer will dictate the structure of British aviaition for decades to come. Shame this once superb and proud Northern airline is now simply a slot minder for whichever disinterested investor has the courage to take it on.

    Several bmi executive have already gone on gardening leave as Lufthansa tightens its grip. Rumour has it CEO Nigel Turner is not long for his role…


    Hess963
    Participant

    Hi everyone !!

    V.K. from my friends source yesterday—Martin Broughton of BA was seen to be travelling to Germany last week inorder to meet some LH representatives??
    Could it be BA is interested in BMI again?? Then you should probably know more than the rest of us here in the forum…


    VintageKrug
    Participant

    I would not necessarily know any more than anyone else on this Forum.

    However BA, along with a number of other airlines including VS, is taking this opportunity to review bmi’s books (which IMHO have been rather expertly cooked over the past few years); ultimately I doubt BA would ever be permitted to buy the majority of bmi’s slots.

    This was confirmed last week:

    http://uk.reuters.com/article/idUKTRE58514J20090906

    What is certain is that those slots will be taken by fewer shorthaul flights, whoever eventually ends up with them.


    Hess963
    Participant

    Oh, personally I think this is bad news..if BA really merge with BMI and create a monopoly in LHR. This not favourable for us customers. I still believe in the diversity of choices in LHR. Whoever gets BMI and its slots, let us hope there is no price raising competition in the future….


    VintageKrug
    Participant

    The point I was making is that it would be highly unlikely, for a range of reasons, that BA would purchase bmi.


    GoonerLondon
    Participant

    ON the contrary – BA might be the only player with the cash (for such a prize they will do all they can to raise it).

    Competition – Notwithstanding a greater share at LHR, it still leaves BA with less share at LHR than competitors at other Euro hubs. Furthermore no one can argue there is competition problems on short-haul from London.

    The AF experiment of operating long haul flights from LH shows the difficulty of a new entrant, which reduces the appeal, particularly from a Euro Major.

    VS would love to bid – but I think their major shareholder will block investment of the size required

    Not sure ownership rules or route structure would justify a Middle Eastern carrier spending. Moreover the wealth funds of that region are said to be over-leveraged now.

    Which leaves us with US airlines, who could feasibly use the slots more productively. But do they have the cash?

    No for me, the most likely scenario is BA buying the LHR fleet, routes and slots, with Easyjet or flybe taking up the regional operations. BA will cite the need to consolidate to protect their business. They are the only ones that could create an economic case to justify spending to the extent that LH will demand to recoup their forced outlay.


    Hess963
    Participant

    I do approve your conclusions GoonerLondon. I think we don’t need to play “hide and seek” here. LH wants to concentrate its strategy towards OS and SK and wants to get rid of BMI as gainfully as possible. So will BA will finally go forward publicly as most of our members in this forum know BA wants to be “primus” in LHR. On the other hand, which US airline will have enough money and sensible expantion plans for LHR to go for it. Most of the major US airlines are either busy consolidating or struggling not to go bankrupt.


    Airpocket
    Participant

    I think the EU’s anti-trust bodies might have something to say about BA’s attempt to muscle in on prime routes at LHR through the purchase of BMI. I’m sure the other airlines using T1 would,too.


    GoonerLondon
    Participant

    Well these things are normally determined on a route by route perspective. There are 3 broad categories here:

    Euro short haul: As per VKs note starting this thread, they are pulling out of many routes, not able to compete. Their network is barely a shadow of what it once was. So no competition issues with this

    Mid -Haul: As a consequence of no real future short haul, they’ve staked their future on the routes that are ex B-Med, and were only recently flown as BA. Given come of these routes are relatively new I doubt they are making masses of money here. Only Cairo, Tel Aviv and Moscow are in direct competition with BA, most of the others they run code share with BA. I cant see too much competion trouble here

    Domestic: this is the trickiest, as Scottish / Manchester customers do need to transfer to LHR. But this is only an issue on 3 routes. BMI are the sole incumbent on the others which BA left many years ago or never operated. So there might be a need to allow a new operator on for competition.

    So overall I don’t really see a huge competition case to answer. A few adjustments and concessions should be sufficient on the few routes where BA and BMI actively go after each other.


    Tallyhochaps
    Participant

    Agree with Gooners scenario, looks as if LH want to offload BMi just to ‘get them off the books’. VS maybe a fit and maybe BA for the long haul stuff, though not sure how some destinations that BMi have like the ‘stans’ in former russian republics etc, maybe some one else may take them…it’s really about those high profile/cost landing slots at LHR!.

    As for the regional routes, well FlyBe took over BA Connect etc and made it work to a degree so they may have a look at BMi regional network etc and they do use similar type aircraft…still we shall have ‘watch this space’ etc


    GerryHodes
    Participant

    In view of all of the foregoing re the apparent atrophy of this once-wonderful airline, does anyone have advice on whether I should be panicking about my 200k+ BMI miles? Thanks in advance.


    GoonerLondon
    Participant

    No I don’t think you need to panic Gerry. The company wont ‘fold’ and who ever takes them on will want to maintain goodwill and future custom amongst its customer base.

    In the scenarios i mentioned above, it depends who ‘takes over’ BMI who could end up taking on the programme. BA could absorb it into Exec Club before it sells on the regional operation, or it could form part of the package to the likes of Flybe.

    Another option is that LH folds it into Miles and More (as just has with the Bussels Air programme) before any sale if it involves a carrier like Easyjet who don’t have a FFP.

    What this does mean is there is less certainty of how and where your miles could be used. The BMI scheme is more generous on redemption, so you will get more for your miles if you use them soon. On the other hand, you might get better availability in a new scheme.

    The only scenarios where you can maintain Star Alliance status is if BMI stay independent, or its scheme becomes part of Miles and More.


    GerryHodes
    Participant

    Many thanks for that, GL


    VintageKrug
    Participant

    I would agree there is no need to “panic”.

    But there have been significant changes to the bmi scheme, such as the increased number of miles and cash required for F “cash and miles” redemptions from x2 to x2.5, and also further restricted redemption availability on Lufthansa F, which are no doubt a taste of things to come.

    The big appeal of the bmi scheme is the “cash and miles” option, which means for instance you can fly Star Alliance business class one way for 18,750k bmi miles from London to USA plus a nominal cash fee and taxes (about £180 plus taxes).

    Because the mileage earning is so generous on bmi, you can earn most of these simply by applying and sparingly using a bmi MBNA American Express card. Depending on which card you opt for, you get between 20k-24k miles:

    http://www.flybmi.com/bmi/en-gb/diamond-club/credit-card/credit-card.aspx

    It is highly likely the cash plus miles option will either be made less attractive or removed all together should the scheme become part of Miles & More. So if you have taken advantage of these lucrative redemption opportunities in the past, it may be an idea to book up some trips, now, before the option is removed by Lufthansa or another owner.

    Here is the bmi redemption chart, for which a degree in Rocket Science is a prerequisite:

    http://www.flybmi.com/bmi/src/html/diamondclubhowtospendmiles.html

    bmi runs a call centre in Pune, India, which can be hit and miss. If you get a good agent, then all is fine, but their systems are very manual and training is not all it could be. My experience has been good to excellent the last five times I have called them, with one agent I had to thank for her assistance and say goodbye without completing my booking.

    If you pan on making a successful bmi redemption, it is ESSENTIAL that you do some research using either the free but clunky “ANA redemption tool” OR take out a subscription to Expertflyer. Do this and enquire 6-9 months out and you should be able to get a flight within a few days of your preferred date.

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