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| Founded | 1949 (Derby Aviation Ltd.) | |||
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| Hubs | London Heathrow | |||
| Frequent-flyer program | Diamond Club | |||
| Airport lounge |
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| Alliance | Star Alliance | |||
| Subsidiaries | ||||
| Fleet size | 27 (+3 on order) | |||
| Destinations | 35 | |||
| Company slogan | Better for Business | |||
| Parent company | Lufthansa | |||
| Headquarters | Donington Hall Castle Donington, United Kingdom |
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| Key people |
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| Website | www.flybmi.com | |||
British Midland Airways Limited (trading as bmi or British Midland International)[1] is an airline based at Donington Hall in Castle Donington in the United Kingdom, 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.
BMI is currently a wholly owned subsidiary of Lufthansa, who announced an agreement in December 2011 to sell the airline to the owner of British Airways, International Airlines Group. The deal does not include subsidiaries Bmibaby and BMI Regional.[2] Lufthansa have been in talks with a group of Scottish private investors to sell BMI Regional since October 2011.[3]
British Midland Airways Limited holds a Civil Aviation Authority Type A Operating Licence, permitting it to carry passengers, cargo and mail on aircraft with 20 or more seats,[4] and is currently ranked as a 3-star airline by Skytrax.
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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.[5]
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.
On 1 October 1964, after buying the Manchester Airport based schedule and charter airline Mercury Airlines,[6] 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 Dart 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.[6] 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 One-Eleven, followed by the Boeing 707 in 1971. In 1972 Bishop became Managing Director, and agreed to withdraw the BAC One-Elevens 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 a Californian entrepreneur, Bishop raised £2.5million to lead the management buy-out, and was appointed Chairman as a result, afterwards stating "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."[6] 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.
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, BMA was branded simply British Midland, and a new logo of a stylised red BM crowned with a diamond shape appeared on the aircraft tailfins. 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 March 1987, Airlines of Britain Holdings (ABH) was formed to act as a holding company for British Midland Airways and British Midland Aviation Services. 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. ABH became British Midland Plc in 1997, when it was de-merged as part of wide restructuring.[1] Towards the end of the 1990s, British Midland switched to Airbus and Embraer for its fleet renewal programme.
In July 1999 Sir Michael Bishop formally opened the British Midland Training Centre in Stockley Close.[7] That year, Scandinavian Airlines System (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; the airline joined in 2000.
In 2001, British Midland launched a new corporate identity, involving the rebranding of the airline as bmi British Midland, subsequently shortened to just bmi in 2003.[1] The new identity featured a brighter blue, the replacement of the grey with white and a fading Union Flag with BMI lettering on the tail. This 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.
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.[8] In early 2006, the Association of European Airlines[9] 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[10] a pre-tax profit of £10 million for the year ending 31 December 2005.
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 late 2006, BMI launched a scheduled service to Moscow Domodedevo in co-operation with Transaero Airlines on 29 October 2006, which used a dedicated A320 aircraft (G-MIDO) with special seating for the service, including leather seats and a 40" seat pitch. In 2007 the airline launched non-stop services from its Heathrow hub to Cairo and Amman, raising the airline's profile in the Middle East significantly. BMI announced on 5 November 2008 that it would end all longhaul operations from Manchester Airport. The two Airbus A330 aircraft based there were moved to Heathrow.[11]
In February 2007, BMI bought British Mediterranean Airways (BMED),[12] a British Airways franchise partner, and as a result gained access to new markets in Africa, Middle East and Central Asia that were served by the carrier. As part of the purchase deal, BMI sold BMED's Heathrow slots to British Airways for £30 million. These were handed over to British Airways in late 2008/2009. The sale meant BMI had 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.
In November 2009, following the complete 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.[13] It was said that the restructuring could result in the loss of around 600 jobs – around 13% of the airline's workforce.[14]
On 12 January 2010 BMI announced that from 28 March 2010 they would 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 resulted in the closure of the Dublin base which consisted of one plane and 33 cabin crew.[15]
In April 2010, the carrier announced it would begin using the British Midland International name in full, whilst retaining the bmi logo and continuing to be known by those initials.[16]
The airline has its head office at Donington Hall in Castle Donington in North West Leicestershire, Derby.[17] The airline moved its headquarters to Donington Hall in 1982.[18] In 2011, BMI employed 527 staff at Donington Hall.[19]
British Midland also has an office in the Stockley Close Industrial Estate in West Drayton, London Borough of Hillingdon, near London Heathrow Airport. British Midland has a 50 year lease on the property, starting on 25 March 1999 and ending on 24 March 2049. The main building is the flight training centre, which opened in 1999. The smaller building, a warehouse, had been established before 1970 and is currently unused.[20]
At one time British Midland had its head office at 78 Buckingham Gate in the City of Westminster, London.[21] At a later time, its head office was at East Midlands Airport in Castle Donington.[22]
In 1999, Scandinavian Airlines System (SAS) sold part of its stake in British Midland to Lufthansa, which was seeking a stronger position at London Heathrow Airport, with the condition that British Midland join the Star Alliance. At the time, British Midland chairman Sir Michael Bishop owned a 50% majority in the company. Between 1999 and 2004, Lufthansa sought to sell some or all of its share in the airline. Virgin Atlantic hoped to buy the shares in order to then merge both airlines, as BMI was already Virgin's preferred feeder airline into Heathrow. Such a merger would have brought 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 11 September 2001 attacks. A merger would have strengthened Virgin Atlantic's base at Heathrow, where BMI has hundreds of valuable take-off and landing slots, to increase the competition with its rival British Airways.
The two airlines combined would have 17% of Heathrow slots against British Airways's 43%. British Airways was worried about the rivalry it would face if such 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. However in 2004 talks of any merger of the three airlines stopped. In late 2006 the airline again dismissed renewed speculation that Virgin Atlantic 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.[23]
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.[24] In October 2008, Lufthansa announced it would be taking over BMI by purchasing the 50% shareholding of Sir Michael Bishop to consolidate with the 30% share it already owned.[25]
The European Antitrust body approved the takeover on 14 May 2009, allowing Lufthansa to become the majority stakeholder. 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 would take direct control.[26] In June 2009 it was announced that Lufthansa would buy the remaining stake in the airline from Sir Michael Bishop for less than originally agreed upon.
Lufthansa announced in September 2011 that it planned to sell BMI following continued losses.[27] Virgin Atlantic were mooted to be considering an offer;[28] but in early November British Airways' parent International Airlines Group announced an agreement in principle to purchase the airline.[29] The sale does not include BMI Regional, which is to be sold to a group of Scottish investors.[3] Virgin Altantic confirmed on 12 December 2011 that it had also made an offer for BMI and signed an agreement in late November to allow them to conduct due diligence on the airline. It is believed that the bid amount of around £50m is half that offered by British Airways' parent company IAG previously; however Virgin hope that a quicker sale due to fewer potential regulatory issues over the IAG bid, could convince Lufthansa to sell BMI to Virgin Atlantic for less money than IAG have offered.[30]
On 22 December 2011, IAG confirmed it had entered a contract to buy BMI from Lufthansa for £172.5m. This would increase IAG's share of take-off and landing slots at Heathrow from 45% to 53%.[31] Richard Branson pledged to fight the deal, urging European competition authorities to intervene. [32] The deal included the option for Lufthansa to sell BMI Regional and Bmibaby separately as they are not required by IAG; the deal price would be lowered should Bmibaby not be sold. Under the agreed contract, Lufthansa would continue to be responsible for the BMI pension scheme after the sale was completed.[33]
Besides the main services provided under the main BMI brand, the airline also operates a regional subsidiary named BMI Regional, headquartered in Aberdeen.
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, from its bases at Belfast-City Airport, East Midlands Airport and Birmingham Airport.
The key trends for BMI over recent years are shown below (figures as at year ending 31 December, and include Bmibaby):[34]
Financial data is reported in pounds sterling, and then in euros, because BMI was fully consolidated into the Lufthansa group of airlines on 1 July 2009.[35]
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
|---|---|---|---|---|---|---|
| Turnover (£m) | 869 | 905 | 1,023 | 1,046 | ↓ | |
| Turnover (€m) | 541 | 896 | ||||
| Pre-tax profits (£m) | 10.0 | 29.7 | 15.5 | −155.6 | ↓ | |
| Pre-tax profits (€m) | -44 | -117 | ||||
| Number of employees | 4,346 | 3,613 | ||||
| Number of passengers (m) | 10.5 | 10.5 | 10.6 | 10.0 | n/a | 6.2 |
| Passenger load factor (%) | not available | |||||
| Number of aircraft (at year end) | 67 | 59 | ||||
As of 1 January 2012, BMI has codeshare agreements with the airlines listed below.[36]
* denotes a Star Alliance partner airline
As of December 2011,[39] the BMI fleet consists of the following aircraft, with an average age of 7.7 years:[40]
| Aircraft | In Service | Orders | Passengers | Notes | ||
|---|---|---|---|---|---|---|
| C | Y | Total | ||||
| Airbus A319-100 |
|
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— | 130 144 |
130 144 |
1 aircraft operated for Lufthansa |
| Airbus A320-200 |
|
|
22 20 0 |
102 108 156 |
124 128 156 |
2 aircraft operated for Lufthansa |
| Airbus A321-200 |
|
|
31 | 118 | 149 | |
| Airbus A330-200 |
|
|
42 | 156 | 198 | |
| Total | 27 | 3 | ||||
On flights from London Heathrow within the UK and to Ireland, economy class have a selection of buy onboard catering available for purchase, flexible economy class have complimentary snacks and drinks.
On European flights and services to Tripoli, Tunisia and Morocco, a two class in-flight service is in place, with a hot three course meal for the business cabin, and complimentary food and drinks served in the economy cabin.
On Midhaul and the Freetown route, a two class in-flight service is also in place. The business cabin includes a three course meal and in-flight entertainment. A hot meal and complimentary drinks are served in the economy cabin.
On A330 services to Saudi Arabia, business, premium economy and economy cabins are available, each providing with complimentary drinks and food.
Diamond Club is the frequent flyer programme of BMI, with three membership levels: Blue, Silver and Gold.[41]