bmi

British Airways/IAG with bmi looks to re-establish world leadership – and long term survival

It can be a fine line between survival and success, just as the blowtorch of a threatened existence provides a powerful motive to pursue ambitious goals.

Last month’s International Airlines Group (IAG)/British Airways move on bmi is only one more piece in the strategic kaleidoscope opening out in front of the Group Chairman, Willie Walsh. The world is his oyster at present. Answering a question following the bmi purchase announcement, Mr Walsh said that despite the uncertain economic environment that Europe’s politicians have created, this was a time of opportunity. His airline is well placed now to capitalise and, as bad news for others spells bargains in the marketplace, the time could well be ripe. In the process, London Heathrow Airport is firmly in the spotlight as Virgin Atlantic also remains a sale possibility. Yet for BA and all of its major rivals, the elephant in the room remains how to service shorthaul network connections profitably.

IAG acquisition of British Midland would give British Airways 20-40% capacity increase at Heathrow

The in principle agreement between British Airways and Iberia owner International Airlines Group (IAG) to acquire British Midland from Lufthansa would allow British Airways to increase its number of seats out of prized and slot-restricted London Heathrow airport by 20% to 40% under a range of scenarios. Oneworld's share of traffic at London Heathrow could potentially increase from 47% to 60%.

With such dominating control of capacity from British Airways and oneworld, it is little wonder Virgin Atlantic is trying to secure a deal with Lufthansa for British Midland and its valuable 9% share of Heathrow slots. A Virgin Atlantic acquisition of British Midland, even if British Airways is close to signing the deal, would add to Virgin's bargaining power as it seeks to form or join an alliance to remain competitive.

A short statement from IAG on 4-Nov-2011 about the in principle agreement it hopes to finalise in coming weeks ends Lufthansa's long quest to shed itself of under-performing acquisition British Midland.

Virgin Atlantic alliance decision likely to reset 'balance of power'

In a recent interview with Forbes, Virgin Atlantic's flamboyant chairman, Richard Branson revealed the carrier is near a decision on joining one of the three global alliances. Virgin is one of the largest airlines still unaligned and its home base at London’s crowded Heathrow Airport makes it an especially important addition to one of the groups.

UK Government publishes call for evidence about its stake in NATS

The UK Government is taking another look at its ownership in UK air navigation services provider (ANSP) NATS, announcing a "call for evidence" over its stake. The ANSP, partially privatised in 2000, has been the subject of much debate over the past six months, concerning the ownership levels of the government and other partnersft6.

bmibaby ceases Cardiff and Manchester operations to expand at Belfast, East Midlands, Birmingham

bmibaby stated it would cease all operations from Cardiff and Manchester Airports at the end of the summer 2011 schedule. As a result, four bmibaby aircraft based at the two airports will be redeployed to Belfast, East Midlands and Birmingham. The airline currently operates 40 weekly services from Manchester and 30 weekly services from Cardiff to European destinations.

European airlines report single-digit traffic growth in 2010; profits remain weak

European airlines reported single-digit growth last year - a welcome improvement from 2009's depressed level - but 2010 was a lacklustre year overall. Full year data has been released by the Association of European Airlines (AEA), the European Low Fares Airline Association (ELFAA) and EUROCONTROL. As noted by EUROCONTROL, growth across the continent last year was driven mainly by LCCs.