bmibaby Winding up Operations

bmibaby, a subsidiary of UK-based British Midland Airways Limited (bmi), is to close its operations.

Bmi is an airline previously owned by Lufthansa, a German airline company, and recently sold to British International Airlines Group (IAG), the parent company of British Airways.

IAG will reportedly be closing the bmibaby operation due to it being unable to sell the loss-making airline. Operations are currently being controlled, with flights being reduced from early June 2012.

In a statement, the airline said, ‘As part of the review and as a preliminary measure, we have had to make changes to our summer 2012 schedule and cancel a number of routes.

We will continue to operate bmibaby flights to the majority of our summer destinations from East Midlands and Birmingham airports until Sunday, September 9, 2012.

We recognise this news may be frustrating for customers and we would like to apologise for any inconvenience caused. We will do all we can to keep you up-to-date with the latest information and make the process as smooth as possible.’

According to the statement, the company is currently in a discussion with its 470 employees to ‘to review future options for the bmibaby business’.

The interim managing director of bmi, Peter Simpson, said, ‘bmibaby has delivered high levels of operational performance and customer service, but has continued to struggle financially, losing more than £100 million in the last four years. In the consultation process, we will need to be realistic about our options.

To help stem losses as quickly as possible and as a preliminary measure, we will be making reductions to bmibaby’s flying programme from June. We sincerely apologise to all customers affected and will be providing full refunds and doing all we can with other airlines to mitigate the impact of these changes.’

European Commission Releases Statement on bmi Sale

The European Commission (EC), the executive body for the European Union, has released a statement defending its decision to approve the sale of British Midland International (bmi), an airline owned by Germany-based Lufthansa, to British International Airlines Group (IAG), the parent company of British Airways.

Earlier Virgin Atlantic, an airline subsidiary of UK-based Virgin Group, had announced its intention to appeal against the sale of bmi, although the sales process will not be affected by this appeal. Virgin Atlantic has claimed that the EC has approved the sale too quickly, and the 14 airport slots that BA are giving up at Heathrow airport, as a proviso of the £172.5 million deal, were insufficient to ensure healthy competition in the UK aviation market.

In a statement, the EC has clarified its stand by saying, ‘We are confident that the commitments proposed by IAG address all competition issues identified and we stand by our decision to clear the transaction subject to these conditions.

In this case, a decision was reached in 35 working days, which is not particularly fast. For example, out of 319 adopted merger and acquisition decisions in 2011, 98 percent were adopted within this timeframe.

Moreover, as described in our best practices guidelines, the commission held in-depth pre-notification contacts with the parties as early as November 2011, well before the notification took place on February 10, 2012.’

Virgin Atlantic will be able to appeal to the General Court of the EU within two months of publication of a full report by the EC on the sale of bmi to IAG.

British Airways takeover will lead to 1,200 job losses at BMI

The takeover of BMI buy the parent company of British Airways (IAG) will lead to a possible 1,200 job losses, the company announced today.

The takeover was approved by the European Commission in March 2012 after the Commission looked into the integration of the two airlines operations at Heathrow Airport.

Most of the job losses will be at BMI’s head office at Castle Donington in Derbyshire.  However, British Airways were keen to stress that up to 1,500 jobs have been saved by the takeover, including 1,100 cabin crew, pilots and engineers and up to 400 passenger service personnel at Heathrow’s Terminal 1.

Keith Williams, British Airways’ chief executive, said ‘BMI is heavily loss making and is not a viable business as it stands today. Our proposals would secure around 1,500 jobs that would otherwise have been lost. As we look to restructure the business and restore profitability, job losses are deeply regrettable but inevitable. We will work with the unions to explore as many options as possible and are already working with industry partners.’

He also said ‘This deal is good news for our customers and will offer new destinations, new routes and new schedules in due course. For customers with BMI bookings to or from Heathrow this summer, it is business as usual and customers can continue to book with confidence.’

BMI was previously owned by German carrier Lufthansa and had been losing over £150m per year before the takeover, carrying 3 million passengers per year and flying to 25 countries around Europe.