BMI (airline): Wikis

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BMI
IATA
BD
ICAO
BMA
Callsign
MIDLAND
Founded 1949 (as Derby Aviation Limited)
Hubs
Frequent flyer program Diamond Club
Member lounge bmi No.1 Heathrow, Diamond Club Lounge, bmi Business Lounge
Alliance Star Alliance
Subsidiaries
Fleet size 34 (+3 orders)
Destinations 30
Company slogan Better for Business
Parent company
Headquarters Donington Hall, Castle Donington, North West Leicestershire, England
Key people

(Fmr Chairman)

  • Wolfgang Prock-Schauer

(Chief Executive Officer)

Website www.flybmi.com
Donington Hall, head office of BMI

British Midland Airways Limited (styled as bmi, and formerly operating as British Midland International), is a scheduled airline based in Donington Hall in Castle Donington, England, United Kingdom,[1][2] close to East Midlands Airport. The airline flies to destinations in Europe, the Middle East, Africa and Central Asia from its operational base at London Heathrow Airport, where it holds 11% of all take off and landing slots and operates over 2,000 flights a week. In January 2007, BMI bought British Mediterranean Airways which has enabled it to serve a wider range of mid-haul destinations.

British Midland Airways Limited holds a United Kingdom Civil Aviation Authority Type A Operating Licence. It is permitted to carry passengers, cargo and mail on aircraft with 20 or more seats.[3]

On 29 October 2008, BMI shareholder Lufthansa announced that it was acquiring a further share of the airline for around €318 million, giving it an 80% shareholding.[4] The merger was delayed while the European Commission considered the effect on competition but it was subsequently approved on 14 May 2009.

In June 2009 it was announced that Lufthansa planned to buy the remaining stake in the airline from Michael Bishop for less than originally agreed, and Lufthansa took full control of the airline in July 2009.[5] Shortly thereafter in November 2009, and following a due diligence exercise by Lufthansa, the airline announced a restructuring, suspending seven routes from 2010 and reducing the fleet by nine aircraft.[6]

Contents

History

The airline dates back to the formation of Derby Aviation Limited on 16 February 1949. Derby Aviation was a subsidiary of Air Schools Limited which had been formed in 1938 to train pilots for the RAF. In 1949, the company formed both Derby Aviation based at Burnaston near Derby and Wolverhampton Aviation based at Pendeford, near Wolverhampton offering ad-hoc charter and freight flights with De Havilland Dragon Rapides, as well as aircraft maintenance and brokerage.[7]

Flying instruction ceased in 1953 with the start of scheduled flights from Derby and Wolverhampton to Jersey. When the first Douglas DC-3 arrived in 1955, Wolverhampton Aviation had been phased out and the company's sole base became Burnaston Airport. International services commenced in 1956 to Ostend and holiday flights to mainland Europe began. The company was also contracted by Rolls-Royce to transport aero engines to customers throughout the world. In 1959, the company changed its name to Derby Airways. Domestic scheduled flights within the United Kingdom were launched toward the end of the decade.[citation needed]

In the 1960s British Midland had its head office at 78 Buckingham Gate in the City of Westminster, London.[8]

Airbus A319-100 takes off
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BMA

Two British Midland Douglas DC-9s at Teesside Airport in 1994.

On 1 October 1964, after buying the Manchester Airport based schedule and charter airline Mercury Airlines,[9] the company changed its name to British Midland Airways (BMA) and moved operations from Burnaston to the recently opened East Midlands Airport. The corporate colours of blue and white were adopted at that time, with the introduction of the first turboprop aircraft, the Handley Page Herald.

Minster Assets, a London-based investment and banking group, acquired the airline in 1968, and in 1969 promoted former Mercury ground handling manager Michael Bishop to become the company's General Manager.[9] Bishop from this point forward drove the company with Domestic and European expansion continued apace, and in 1970 BMA entered the jet age with the introduction of the BAC 1-11, followed by the Boeing 707 in 1971. In 1972 Bishop became Managing Director, and agreed to withdraw the BAC 1-11s from service and lease the 707s to other airlines, as BMA concentrated on turboprops such as the Vickers Viscount which was operated from 1967 until the mid 1980s. Though the 707 fleet was increased, none operated for BMA on scheduled services, or charter services on their behalf until 1981, leased to other operators. The Douglas DC-9 gradually converted most of the airline's domestic and European service to jet operation with its introduction in 1976.

In 1978, Minster Assets decided to sell the company. With the help of an entrepreneurial Californian dentist, Bishop raised £2.5million to lead the management buy-out, and was resultantly appointed Chairman: "I had to borrow the money from an American citizen. Most venture capitalists want a return of 40% to make up for all their other failures and they want an exit strategy."[9] That year, British Midland and British Airways agreed to route swapping, resulting in: British Midland Airways relinquishing its continental routes from Birmingham to Brussels and Frankfurt; and BA handing over its routes from Liverpool to Heathrow, Belfast, Dublin, Jersey, the Isle of Man and Glasgow. Annual passenger numbers topped 1 million for the first time in 1979.

In 1981, an application to fly between Heathrow, Glasgow and Edinburgh was denied by the CAA. The ruling was overturned, however, after an appeal was lodged with the Secretary of State for Trade and Industry. With the introduction of these services, BMA and BA were now in direct competition. BMA, together with British & Commonwealth Shipping, formed Manx Airlines in 1982, and the following year BMA purchased a 75% stake in Glasgow-based airline Loganair.

On 24 December 1982, British Midland Airways acquired the aeroplane Douglas DC-9-15 (PH-DNB c/n 45719) from KLM.[10] The plane was first flown on 16 December 1965 and BMA registered it in the UK on 1 February 1983 as G-BMAG with the name Nassak Diamond.[10] BMA flew the plane until 22 March 1995 and subsequently leased it to Intercontinental of Columbia and then sold the plane to TEASA of Mexico, where it was scrapped in 2002/2003.[10]

In March 1987, Airlines of Britain Holdings (ABH) was formed to act as a holding company for British Midland and British Midland Aviation Services. ABH became British Midland in 1997 when it was de-merged as part of wide restructuring.

Old revised British Midland logo

A new colour scheme was unveiled in 1985. Aircraft were now painted in very dark blue, with a deep grey lower half of the fuselage and a red relief. At this time, the airline simply became British Midland, and a new logo of a stylised red BM crowned with a diamond shape appeared on the aircraft tailfins (see right). Airport lounges were introduced at UK hubs and the Diamond Club frequent flyer programme was launched. The charter market was abandoned and the 707 fleet withdrawn at this time.

In 1992, British Midland became the first airline to offer a vegetarian choice of in-flight meals on UK domestic services as well as one of the first airlines in Europe to do so. Towards the end of the 1990s, British Midland switched to Airbus and Embraer for its fleet renewal programme.

BMI

In 1999, Scandinavian Airlines (SAS), a shareholder in British Midland since 1987, sold some of its stake to Lufthansa on the condition that British Midland joined the Star Alliance. BMI joined in 2000 and launched a new corporate identity in 2001. This involved the rebranding of the airline as BMI British Midland. The new identity features a brighter blue, the replacement of the grey with white and a fading Union Flag on the tail with "BMI" on it. In 2003, "British Midland" was dropped from the name and the airline is now referred to simply as BMI, although the legal name of the company remains British Midland Airways Limited. The new identity coincided with the launch of transatlantic services in 2001 to Washington, DC and Chicago from Manchester Airport using wide-body Airbus A330 aircraft. Services from Manchester to Las Vegas followed soon after.

BMI operated a service to Mumbai from London Heathrow between May 2005 until October 2006, after the UK and India concluded amendments to their bilateral air service agreement. Services to Riyadh followed, commencing on 1 September 2005 after British Airways ceased to serve Saudi Arabia earlier that year.

In 2007 the airline launched nonstop services from its Heathrow hub to Cairo and Amman, raising the airline's profile in the Middle East significantly.

The BMI Group carried 7.95 million passengers during 2002. By 2005, the total had risen to 10.1 million, the third highest of any UK airline.[11] In early 2006, the Association of European Airlines [12] reported a drop in passengers carried and load factors for BMI mainline and regional services (excluding Bmibaby) whilst reporting increased loads for other AEA members over the same period. Despite this drop in passenger figures, BMI group reported [13] a pre-tax profit of £10 million for the year ending 31 December 2005.

In late 2006, BMI launched a scheduled service to Moscow Domodedevo in co-operation with Transaero on 29 October 2006 with a dedicated A320 (G-MIDO) with special seating for the service, including leather seats and a 40" seat pitch.

BMI announced on 5 November 2008 that it would end all longhaul operations from Manchester Airport. The 2 Airbus A330 aircraft based there were moved to Heathrow.

Subsidiaries

In 2002, BMI set up a low-cost subsidiary Bmibaby using Boeing 737s which were displaced after BMI's fleet renewal programme favoured an all-Airbus fleet. Bmibaby now flies routes between major and secondary airports around Europe, but does not operate from Heathrow.

In January 2007, BMI bought British Mediterranean Airways,[14] (BMED) a British Airways franchise partner, and as a result has gained access to new markets in Africa, Middle East and Central Asia that were served by the carrier. As part of the deal to buy BMED, BMI sold BMED's Heathrow slots to British Airways for £30 million. These are due to be handed over to British Airways in late 2008/2009. This means that they will have to reduce some of their other flights to fit the former BMED flights in to the schedule in 2009. BMED was fully integrated into BMI on 28 October 2007.

Restructuring

In November 2009, following the takeover of BMI by Lufthansa, the airline announced a restructing of both mainline and regional operations in an effort to suspend loss making routes and adjust capacity. The measures include a fleet reduction of nine aircraft from the mainline fleet (two of which are operated by BMI Regional) and the suspension of routes from London Heathrow to Amsterdam, Brussels, Tel Aviv, Kiev and Aleppo in 2010. Seasonal routes from London Heathrow to Palma and Venice will also be discontinued.[15]

The restructuring may result in the loss of around 600 jobs, around 13% of the airline's workforce.[16]

On 12 January 2010 BMI announced that from 28 March 2010 they will reduce the number of flights between Dublin and London Heathrow from 6 to 4 per day due to the current economic climate leading to low consumer demand. This will result in the closure of the Dublin base which consists of 1 plane and 33 cabin crew.

Economy Flexible

On 18 January 2010 bmi announced that they will cancel all of the business class service on the domestic mainline routes from 27 January 2010. However, the economy cabin will be divided into two sections - "Economy" and "Economy Flexible" "Economy Flexible" will offer double miles, lounge access and free meals and drinks. Gold members of the diamond club will not be able to use their upgrade vouchers to upgrade from "Economy" to "Economy Flexible".

Diamond Club

Diamond Club is the frequent flyer programme of bmi. There are approximately 750,000 active Diamond Club members [17].

Benefits and Membership Levels

bmi Diamond Club has three membership levels: Blue, Silver and Gold. Blue Plus tier does not exist starting from 18 January 2010. When gaining a higher status, the original number of status miles restarts, as well as the membership year.

Blue membership

Blue membership is the lowest membership level of bmi Diamond Club. The Blue membership benefits are [18]:

  • Earning status miles from flights operated by bmi, or by other Star Alliance airline.
  • Earning destinations miles from flights operated by bmi, by other Star Alliance airline, or by any other Airline Partner, from the members and his family travels.
  • Earning destinations miles from hotels, car rentals, shopping, parking and credit card partners.
  • Spending miles on flights, bmi flights upgrades, hotels, car rentals and gifts.

Silver membership

The Silver membership is the middle membership level of bmi Diamond Club. In order to gain or re-gain that status the members will have to earn 16000 status miles within their membership year. The Silver card holders are entitled to all of the benefits of the Blue membership, as well as the following benefits [19]:

  • Star Alliance Silver membership:
    • Priority reservations waitlisting.
    • Priority airport stand-by.
  • Access to lounges when flying with bmi (expect when flying on economy saver fare) with one guest.
  • Bonus of 25% destinations miles for all flights operated by bmi, by Star Alliance airlines or by other airline partners.
  • Priority check-in for bmi operated flights.
  • 20KG additional baggage allowance.
  • Dedicated Silver card enquiry line for bookings or enquiries.
  • An upgrade voucher for Europcar car hire.
  • Guaranteed Business class booking 48 hours in advance on bmi operated flights, even if the flight is full (excludes longhaul flights and Leeds Bradford to Glasgow and Edinburgh).
  • Use of bmi manned check-in desks regardless of fare and destination.

Gold membership

The Gold membership is the highest membership level of bmi Diamond Club. In order to gain or re-gain that status the members will have to earn 38000 status miles within their membership year. The Gold card holders are entitled to all of the benefits of the Blue and Silver membership, as well as the following benefits [20]:

  • Star Alliance Gold membership:
    • Priority reservations waitlisting
    • Priority airport stand-by
    • Priority boarding
    • Priority airport check-in
    • Priority baggage handling
    • Additional checked luggage allowance of 20 kg (or one extra piece where the piece concept applies)
    • Airport lounge access to designated Star Alliance Gold lounges on the day and at the place of departure, on presentation of a valid Star Alliance boarding pass, with a guest.
  • Access to the London Heathrow Airport arrivals lounge when flying with bmi (no guests allowed).
  • Access to Virgin Atlantic Clubhouse when flying with them out of London Heathrow Airport terminal 3.
  • Bonus of 35% destinations miles for all flights operated by bmi.
  • Bonus of 25% destinations miles for all flights operated by Star Alliance airlines or by other airline partners.
  • A dedicated Gold card inquiry line for bookings, inquiries and requests.
  • Four upgrade e-vouchers for use on a bmi flights:
    • One voucher will be used for upgrade from Economy class to Business (on every route except for flights to Cairoa and Saudi Arabia).
    • One voucher will be used for upgrade from Economy class to Premium Economy - on flights to Cairoa.
    • Two vouchers will be used for upgrade from Premium Economy class to Business - on flights to Cairoa.
    • Two vouchers will be used for upgrade from Economy class to Business - on flights to Saudi Arabia.
  • Four upgrade vouchers for Europcar car hire.
  • Business class award for the price of Economy award (except for Cairob, and Saudi Arabia).
  • Premium Economy class award for the price of Economy award to Cairob.
  • Shorter advance notice on bmi free flight redemptions (three working days instead of the usual five).
  • Lifetime Gold membership if the member earned Gold Diamond Club status for 10 consecutive years.
  • Stay at any Radisson Edwardian hotel in London and Manchester and receive a free voucher booklet containing offers for museums, comedy clubs, restaurants and more.
  • When a Gold member doesn't gain enough status miles for re-qualifing Gold status within his membership year, his membership level will be downgraded to Silver even if he earned less than 16000 status miles in his membership year.
  • Gold members with over 55,000 membership status miles can buy a Silver Diamond Club card for a friend or colleague for 16000 destinations miles.
  • Gold members with over 55,000 membership status miles will have any status miles earned over this amount converted to destinations miles up to a maximum of 250,000 destinations miles.

a From 29 March 2010 bmi will not offer Premium Economy class. One voucher will be required to upgrade from Economy to Business.

b From 29 March 2010 bmi will not offer Premium Economy class. Then gold members would get a free upgarde from Economy to Business class on the Cairo route - when booking a reward flight.

Blue Plus membership - does not exist anymore

bmi cancelled the Blue Plus membership by 18 January 2010. However, every Blue Plus member will still be counted as one, until this membership year ends, but there will be no difference between the benefits of the Blue and the Blue Plus tiers.

Ownership

In 1999, Scandinavian Airlines (SAS), a shareholder in British Midland since 1987, sold some of its stake to Lufthansa on the condition that British Midland joined the Star Alliance. Lufthansa also agreed to underwrite any losses British Midland made, in return for a pre-packaged agreed purchase price deal of Bishop's 50% controlling stake, which it could call on at any point in the next ten years.[21] BMI joined in 2000 and launched a new corporate identity in 2001.

Between 1999 and 2004, Lufthansa was looking to sell its share in the airline. Virgin Atlantic was the main airline hoping to buy the shares and then forming a merger of the two airlines. A merger would bring together two well respected airlines with combined ticket sales of more than £2 billion, forming a powerful force in the aviation industry. Neither company would comment on the talks. BMI, headed by Sir Michael Bishop, is believed to have initiated the talks after it fell deep into the red following the September 11, 2001 attacks. A merger would give Virgin's Sir Richard Branson a far stronger base at Heathrow (where bmi has hundreds of valuable take-off and landing slots) to increase the competition with his rival British Airways.

The two airlines would have 17% of Heathrow slots against British Airways's 43%. British Airways was worried about the rivalry it would face if a merger went ahead, and considered the takeover of either BMI or Virgin Atlantic to stop the merger of the two airlines. British Airways concluded it would be easier to take over the smaller airline Virgin Atlantic. In 2004, talks of any merger of the three airlines stopped.

In late 2006 the airline again dismissed renewed speculation that Virgin Atlantic Airways was preparing to make a bid to acquire full control of BMI, despite Sir Richard Branson repeating in a radio interview that such a merger would be a logical business move [22].

In June 2007, SAS announced that it would sell its 20% stake to improve its own group profits. The airline commented that it was in early discussions with Lufthansa over such a sale.[23]

In April 2008 Lufthansa announced plans to take over BMI. Lufthansa already own 30% minus 1 share of BMI and has an option to purchase shares from the 50% plus 1 share holding of chairman Sir Michael Bishop from December 2008 to June 2009.[24]

On 28 October 2008, CEO Nigel Turner announced to staff via the company intranet that Lufthansa have agreed to exercise their option to purchase BMI with the deal expected to be completed in mid January 2009.

In a statement on 14 May 2009, the European Antitrust body approved the take over plans by Lufthansa clearing the way for the German flag carrier to become the controlling majority stakeholder in its British partner.

The statement said: "After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it."

A Lufthansa speaker later announced that this has cleared one of the conditions for the take-over bid. She did however not reveal what the other condition was, simply stating that not all of the contractual agreements have been met and therefore the deal has not yet been finalised.

In June 2009 it was announced that Lufthansa is to buy the remaining stake in the airline from Michael Bishop for less than originally agreed upon. Due to landing rights issues the stake will tentatively be held by a Lufthansa controlled but British based LHBD Holding. Once new bilateral agreements are in place, Lufthansa will take direct control.[25]

Destinations

Fleet

The BMI fleet consists of the following aircraft (at December 2009):[26]

BMI Fleet
Aircraft In
Service
Orders Passengers
(The Business/*Premium Economy/Economy)
Notes
Airbus A319-100 11 0 130 (0/130)
144 (0/144)
2 aircraft operated for Lufthansa
Airbus A320-200 10 0 156 (0/156)
124 (22/102)
128 (20/108)
Airbus A321-200 9 3 195 (0/195)
149 (31/118)
Airbus A330-200 2
1
0
0
218 (18/*30/170)
198 (42/*0/156)
Two Aircraft to leave by 28 March
Boeing 757-200 1 0 160 (28/132) Operated by Astraeus[27]
Total 34 3
*Premium Economy is only available on A330-200 flights to Cairo

The average age of the BMI fleet, including aircraft operated by BMI Regional, is 7.2 years at December 2009.[28]

Fleet reduction

As a result of a restructuring of mainline operations announced in November 2009, in which BMI will suspend loss making routes and adjust capacity across the group, nine aircraft will be withdrawn from the airline's fleet in 2010.[15]

The aircraft due to be withdrawn from the fleet are:[29]

  • 3 Airbus A320
  • 2 Airbus A321
  • 2 Airbus A330-200
  • 2 Embraer 145, part of the BMI Regional fleet.

Codeshare agreements

BMI has codeshare agreements with the following airlines as of January 2010:[30]

Note: This list includes Star Alliance partners, indicated with (*)

In-flight service

Economy class passengers travelling within Western Europe and within the United Kingdom to and from London Heathrow may use the airline's buy on board programme offering drinks and light snacks for purchase. A hot panini is offered free to Flexible Economy customers travelling before 9.30am. After this a choice of two sandwiches, a snack item and a drink are offered. Flights to and from Moscow, Eastern Europe, Africa, and Asia have free meal and drink service in all classes.[31]

Incidents and accidents

British Midland Canadair C-4 G-ALHG at Manchester 29 August 1965

Gallery

References

  1. ^ "Contact us." bmi. Accessed 23 September 2008.
  2. ^ Clark, Andrew. "A generation game." The Guardian. Saturday 18 May 2002. Retrieved on 17 July 2009.
  3. ^ CAA Operating Licence
  4. ^ The Irish Times, Dublin, Ireland: Lufthansa warns on profits, to take control of bmi
  5. ^ BMI > Our History
  6. ^ restructures mainline and bmi regional operations
  7. ^ British Independent Airline & Operators Since 1946 by T Merton Jones April 1972
  8. ^ "World Airline Directory." Flight International. 28 September 1967. 530.
  9. ^ a b c "A generation game". The Guardian. 2002-05-18. http://www.guardian.co.uk/business/2002/may/18/theairlineindustry. Retrieved 2008-11-02. 
  10. ^ a b c "Douglas DC-9". 1000aircraftphotos.com. 15 May 2006. http://1000aircraftphotos.com/Contributions/Damen/5318.htm. Retrieved 15 November 2008. 
  11. ^ United Kingdom Civil Aviation Authority Passenger statistics for UK airlines, 2002 and 2005, table 0.1.6.
  12. ^ Association of European Airlines
  13. ^ Press Release - 2005 Profits
  14. ^ news and press releases | BMI
  15. ^ a b bmi restructures mainline and bmi regional operations
  16. ^ Job cuts planned at airline BMI
  17. ^ http://www.calcalist.co.il/consumer/articles/0,7340,L-3296563,00.html (hebrew only)
  18. ^ http://www.flybmi.com/bmi/en-gb/diamond-club/diamond-club/membership-benefits/blue-membership.aspx
  19. ^ http://www.flybmi.com/bmi/en-gb/diamond-club/diamond-club/membership-benefits/silver-membership.aspx
  20. ^ http://www.flybmi.com/bmi/en-gb/diamond-club/diamond-club/membership-benefits/gold-membership.aspx
  21. ^ "Lufthansa roars into Heathrow". London: The Sunday Times. 2008-11-02. http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article5061705.ece. Retrieved 2008-11-02. 
  22. ^ Airliner World January 2007
  23. ^ BBC NEWS | Business | SAS seeks buyers for bmi holding
  24. ^ Lufthansa To Take Over bmi | AVIATION WEEK
  25. ^ http://www.independent.co.uk/news/business/news/lufthansa-wins-bmi-sale-battle-with-163115m-to-spare-1714387.html
  26. ^ Fleet - CAA Database
  27. ^ Reference for leased B757 aircraft
  28. ^ BMI and BMI Regional Fleet Age
  29. ^ jehtro's Fleet Listings - bmi
  30. ^ BMI Key Facts (29 March 2007)
  31. ^ "Meals onboard." bmi. Accessed October 17, 2008.
  32. ^ "Accident description". Aviation Safety Network. http://aviation-safety.net/database/record.php?id=19690220-0. Retrieved 7 October 2009. 
  33. ^ "Accident description". Aviation Safety Network. http://aviation-safety.net/database/record.php?id=19690320-1. Retrieved 3 September 2009. 
  34. ^ "Accident description". Aviation Safety Network. http://aviation-safety.net/database/record.php?id=19700122-0. Retrieved 5 September 2009. 

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