Also there are two new post on a thread on FT on this issue. What services does the Virgin brand not offer in the UK? [?]
I remember when this first came up as a possibility, and I must say a lot has changed since then.
Given BMI's current state, I would be wary of VS acquiring it unless its for a cut price as it is going to take a lot of work to sort it out.
The new business model (NBM, or Nigel's Big Mistake as it was christened) was destined to be a failure from the start. You only have to go back and look at the thread over on FT when it came up, and you can see that not a single person over their was impressed. And BMI on the whoel chsoe to ignore the frequent flyers and go for the hybrid LCC route, thinking they could trade on their premium name. Instead it really is a laughing stock now, the reversal of the lounge access decision starts to show that they really didn't think this one through but once you alienate the lucrative frequent flyer group, you really are on thin ice as a significant amount of your revenue will start to look elsewhere. BA must really be rubbing it hands together, I know in my instance they are. In the past it was a no brainer if I needed to go to Europe for work, it was always BMI. Now even though I have a BMI Gold card, I will choose BA instead - sure I don't get lounge access per default, but I have Priority Pass.
So if VS do take on BMI, I think the first things they need to do are:
- Completely rebrand BMI, as the name has lost its lustre now (this will cost a lot to do but is required)
- reinvogarate the frequent flyer community, simple things like actually holding Gold Card events instead of just alluding to them
Interesting thing would be to see if they stay in * Alliance.
Thanks,
Richard
Given BMI's current state, I would be wary of VS acquiring it unless its for a cut price as it is going to take a lot of work to sort it out.
The new business model (NBM, or Nigel's Big Mistake as it was christened) was destined to be a failure from the start. You only have to go back and look at the thread over on FT when it came up, and you can see that not a single person over their was impressed. And BMI on the whoel chsoe to ignore the frequent flyers and go for the hybrid LCC route, thinking they could trade on their premium name. Instead it really is a laughing stock now, the reversal of the lounge access decision starts to show that they really didn't think this one through but once you alienate the lucrative frequent flyer group, you really are on thin ice as a significant amount of your revenue will start to look elsewhere. BA must really be rubbing it hands together, I know in my instance they are. In the past it was a no brainer if I needed to go to Europe for work, it was always BMI. Now even though I have a BMI Gold card, I will choose BA instead - sure I don't get lounge access per default, but I have Priority Pass.
So if VS do take on BMI, I think the first things they need to do are:
- Completely rebrand BMI, as the name has lost its lustre now (this will cost a lot to do but is required)
- reinvogarate the frequent flyer community, simple things like actually holding Gold Card events instead of just alluding to them
Interesting thing would be to see if they stay in * Alliance.
Thanks,
Richard
VS will also have to be very careful with any potential for merging FFP's. There are a LOT of BMI Gold card holders out there, through the *A Status match scheme.
Reward bookings 5 years in advance, anyone? (And that's presuming they don't merge to the full extent of *A [:0])
Reward bookings 5 years in advance, anyone? (And that's presuming they don't merge to the full extent of *A [:0])
Originally posted by preiffer
VS will also have to be very careful with any potential for merging FFP's. There are a LOT of BMI Gold card holders out there, through the *A Status match scheme.
Reward bookings 5 years in advance, anyone? (And that's presuming they don't merge to the full extent of *A [:0])
Oh absolutely! I think they should rename to Virgin Europe, and then keep the FFP's separate. SQ play smart and don't play with the Status match promos.
Thanks,
Richard
Originally posted by RichardMannion
- Completely rebrand BMI, as the name has lost its lustre now (this will cost a lot to do but is required)
Agreed that they need to re-brand, but I think the whole "BMI" thing was confusing to start with, as the vast majority of their routes are domestic, and those who don't fly bmi have little idea what it is.
My theoretical solution would be as follows:
BMI needs to be broken up, as they are trying to make too many business models work within one company.
VS could easily absorb the long haul operations out of LHR and MAN, and clearly would like to have the shorthaul LHR options (and slots)
But I couldn't see the other regional services, and BMI Baby fit into a VS acquition, and Sir Michael Bishop could possibly get a better price by selling these parts of the business off to Ryanair, easyJet or Jet2.
The other thing to consider is that the other current shareholders of BMI, i.e. SAS and Lufthansa have a preferential option to buy the business, and their interests may not be served by selling BMI to VS.
Interesting thing would be to see if they stay in * Alliance.
thats the big question. If it is purchased by VS, then you would imagine they would like it to remain in Star (as SQ are shareholders in VS). However if it is purchased separately through another Branson Virgin company then this might be different.
Interesting times....
i must admit, i would love this to be true.
why? because i would love to see my wife in one of the lovely red VS uniforms... [:w]
mind you, i would have to talk her into gong back to work (she has only recently left bmi)
why? because i would love to see my wife in one of the lovely red VS uniforms... [:w]
mind you, i would have to talk her into gong back to work (she has only recently left bmi)
Originally posted by RichardMannion
- Completely rebrand BMI, as the name has lost its lustre now (this will cost a lot to do but is required)
Their name had lustre? I always though it was odd that bmi, even though it's the second largest British airline, is a name barely recognised "in the household", whereas third-place Virgin Atlantic bats way above its weight when it comes to the brand stakes.
Originally posted by pixukOriginally posted by RichardMannion
- Completely rebrand BMI, as the name has lost its lustre now (this will cost a lot to do but is required)
Their name had lustre? I always though it was odd that bmi, even though it's the second largest British airline, is a name barely recognised "in the household", whereas third-place Virgin Atlantic bats way above its weight when it comes to the brand stakes.
that Pix I think, is down to the B&S routes that Virgin fly
They'd sell those A330s A.S.A.P
Using BD's slots- gosh they'd be able to set up so many new routes from LHR, and make so many daily routes 2wice daily.
I reckon they'd sell of BD's short haul fleet to VK, Virgin Blue and Pacific Blue maybe even Virgin America.
It'd be nice for VS to have a bigger presence at MAN too.
If VS bought BD it would be VERY xciting.
VS having ALL those LHR slots!!!!
Using BD's slots- gosh they'd be able to set up so many new routes from LHR, and make so many daily routes 2wice daily.
I reckon they'd sell of BD's short haul fleet to VK, Virgin Blue and Pacific Blue maybe even Virgin America.
It'd be nice for VS to have a bigger presence at MAN too.
If VS bought BD it would be VERY xciting.
VS having ALL those LHR slots!!!!
If VS bought BMI, I doubt they'd get rid of the european operation. However, if they did, as tommy212 said, it could get quite interesting.
Perhaps, BA and VS could split ownership with each inheriting a portion of the slots and with BA aquiring some aircraft and selling the excess.
However, this would not be beneficial to staff and I'm sure getting VS and BA to share ownership would just be like one long divorce.
Cheers,
VS045
Perhaps, BA and VS could split ownership with each inheriting a portion of the slots and with BA aquiring some aircraft and selling the excess.
However, this would not be beneficial to staff and I'm sure getting VS and BA to share ownership would just be like one long divorce.
Cheers,
VS045
It is Bishop that holds the option to put his 50% shareholding onto Lufthansa for £229m which he will surely do sometime this year. Lufthansa'a position on this one is dire, which is what makes it so interesting.
SRB is notorious for taking advantage of situations just like this one. Don't be surprised to see his hand involved in the end-play.
SRB is notorious for taking advantage of situations just like this one. Don't be surprised to see his hand involved in the end-play.
Originally posted by jetwet1
Agreed,if this was indeed to happen I could see SRB making a grab for some of the long haul routes and LHR slots.
It's sad to see what has happened to this once great airline,just stupidity by management.
They have become a bit of a laughing stock , and to be honest have become my least favourite airline to deal with [:(!]. I have to feel sorry for the reps [:o)]that visit our office, they come in for so much flak and criticism nowadays. Not their fault I know. But with some questionable routes (the once daily Madrid and Milan routes ex LHR - soon to be gone, come to mind, and the Middle east, and USA routes ex MAN coming in for criticism), staff who dont know what they are doing (I refer to their call centres in India) [V], and a decreasing client base, surely its only a matter of time before SRB [y]hopefully becomes their white knight and drags BMI back out of the dark ages.
We can all speculate how they would be broken down if taken over but lets see how this plays out and whether Bishop places business sense before pride and does the right thing.
If SRB was to gain some of the 14% of slots BMI hold at LHR compared to the current 3-4% Virgin Atlantic own then I would expect the A380 would not be required.... they only bought it to maximise capacity and they know that the success of the network and UCS revolves around frequency in flights not one big aircraft flying when slots allow. Im sure SQ would be happy to take the orders for these.
There's an interesting article here about the lousy recent performance of BMI.
Total passenger figures are down 13% in the year to February, with London-Glasgow being the worst affected route, down 24%!
January also had a low 53% load factor.
If ever there was a time to buy.....
Total passenger figures are down 13% in the year to February, with London-Glasgow being the worst affected route, down 24%!
January also had a low 53% load factor.
If ever there was a time to buy.....
Originally posted by IanThere's actually a full BMI announcement on that subject, too.
A further development here
I read that article with interest too. Tidying up also means easier to sell?
Virgin buying BMI makes no sense to me other than buying the slots at LHR ... then renting these out while buying more aircraft might just make sense. But buying a business on the slide needs different skills to growing an intercontinental airline with good brand and operational success. My tuppenyworth. Perhaps Sir Michael would be happier to wait for a guaranteed £200m+ from Lufthansa, which would then have the ability to make operational savings from a combined operation that Virgin might not.
Virgin buying BMI makes no sense to me other than buying the slots at LHR ... then renting these out while buying more aircraft might just make sense. But buying a business on the slide needs different skills to growing an intercontinental airline with good brand and operational success. My tuppenyworth. Perhaps Sir Michael would be happier to wait for a guaranteed £200m+ from Lufthansa, which would then have the ability to make operational savings from a combined operation that Virgin might not.
There's a plane at JFK, to fly you back from far away
all those dark and frantic transatlantic miles
all those dark and frantic transatlantic miles
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