Edinburgh Airport

UK carriers rush to snap up bmibaby’s planned route closures

British Airways (BA) is preparing to disband bmibaby, the low-cost unit it unwelcomely acquired from bmi after previous owner Lufthansa failed to find a buyer. But as the saying goes: one man’s meat in another man’s poison and the news of bmibaby’s grounding was welcomed by multiple airlines including Monarch, Flybe and Jet2.com, all of which are swiftly stepping in to backfill capacity.

Anemic-turns-dynamic is not exclusive to bmibaby’s network but a development seen following the recent demise of other small- and medium-sized airlines in Europe such as Spanair, Malev and Cimber Sterling. In those cases, competitors have reacted swiftly and within a couple of days to fill the void.

bmibaby’s closure is indicative of a recent development in Europe: the lavish injection of capital in loss-making carriers is coming to a standstill with public and private shareholders alike halting the operations of these entities, mostly small- and medium sized airlines, a trend long overdue and induced by low or no economic growth in most EU countries implementing stark austerity measures, and high fuel prices.

Vueling grows its low cost Barcelona hub role as Iberia Express focusses on Madrid premium traffic

Vueling's growth this year, the largest since its merger with rival Clickair in 2009, underscores the airline's role as a cost-effective hub carrier with connecting flights at Barcelona's El Prat Airport, a status Iberia concluded it could not achieve in Barcelona, largely pulling out of the market in favour of specially-formed LCC Clickair. After the Clickair-Vueling merger, Iberia retained part ownership (46%, now controlled by Iberia parent International Consolidated Airline Group) while the merged carrier continued its focus on Barcelona. The partnership appears to be working well for both Iberia and Vueling.

That focus has been re-affirmed by the airline's intention to grow summer destinations served from El Prat by a further 10, bringing the total to 70, 23 more than served last year, and representing a 17% seat increase at El Prat. The growth is supported by the addition of four A320s and a single A319.

Scotch broth: Investors positive about Edinburgh airport sale but what would they be taking on?

Under pressure from the UK’s competition watchdog and still trying desperately to stave off the sale of London Stansted Airport, BAA has opted to sell off Scotland’s Edinburgh Airport rather than nearby Glasgow, a move that was anticipated by some but queried by others. Less than a week after the announcement, Global Infrastructure Partners (GIP), Manchester Airports Group (MAG), Fraport and Aeroports de Paris (AdP) have already put themselves in the frame. All of them need to read the small print.

Some observers have been quick to suggest Edinburgh was the “logical choice” for a sale of one of BAA’s Scottish airport assets (Aberdeen, possibly the airport with the best prospects in the country, was never in the mix), and were supported by an announcement by BAA CEO Colin Matthews who stated BAA chose to sell Edinburgh rather than Glasgow Airport because it believes Edinburgh will attract more bidders and command a higher price. "I want to be clear that we would prefer to keep both airports, but given we had to sell one the decision was pretty straightforward," he said. Mr Matthews added Edinburgh should "generate a long line of bidders" as it had proved to be resilient during the economic downturn.