IAG approved to purchase British Midland

So, finally, the EU authorities have today agreed to IAG buying British Midland and saving the airline from the scrapheap. This is good news for the airline’s pilots and cabin crew, most of whom should transfer to BA without problems. Redundancies amongst office staff are likely but these would have happened with or without the involvement of BA or another airline.

To get the agreement, IAG had to offer to give back fourteen slots at Heathrow as opposed to the original ten that they said they would give up initially. Twelve of these are earmarked for domestic and European routes where BA would have a monopoly.

Since BA has also had to agree to specific terms to facilitate interlining of passengers from competing airlines to its domestic services, which was a major concern for Virgin, I wonder which airline is going to come forward and offer to start flying from Heathrow to Edinburgh or Glasgow.

BMI could not make a profit on those routes – even with the clout of Lufthansa and the Star Alliance behind them. I doubt that any airline would see much potential in such routes.

What about Virgin who claimed to be so concerned about the loss of the Scottish routes? Surely now is the time for Richard Branson to put his money where his mouth was…

 

Reasons not to fly BMI Shorthaul Business Class

If an airline is going to fly from Heathrow to European destinations it will have high expenses and some strong competition. Many airlines rely partly on the revenue from connecting passengers to longhaul routes to make the short flights balance in their books. No airline is likely to survive without attracting higher-yielding business passengers and this means that they need to offer a full Business Class service. To be competitive, a new entrant must either offer more or be cheaper to survive. Offering lower standards for the same or higher fares will not work.

BMI have once again started to fly some shorthaul routes in Europe and they seem to be sadly unaware of the facts of life.

Of course, they have been down this road before. They used to have a substantial European shorthaul network with a Business Class that was not quite up to the standards of the bigger airlines but was a little cheaper. Unfortunately, that did not make money and, in an effort to reduce costs, they cut back on the Business Class service which made things worse. Now, they are back again.

BMI have gone to some effort to improve and standardise the service in Business Class on their midlhaul routes. This is not before time because the high fares and variable service was a source of great irritation. Their website is full of information about the improved Business Class but does not make it clear that these standards do not apply on shorter routes. Until we made them aware of the error, anyone clicking on “what the fare includes” for a Business ticket to Berlin would told passengers to expect 50 inches of legroom, in-flight videos and chauffeur transfers. The reality is rather different.

- BMI is the only airline we know of at Heathrow that does not pay the fee for its Business passengers to use the Fast Track security channel.

- You get a seat free next to you but just 32 inches seat pitch as opposed to 34 inches on BA.

-  BMI offer sparkling wine with your meal – BA and others offer champagne.

- The meal tray is attractively designed but the food itself is basic and cheap.

- All other airlines have curtain dividers to keep Business Class section quiet. On flights we have made, the divider was not in use and cabin crew seemed to think it was being phased out. We asked BMI five times for clarification but never got an answer. Maybe they do not know themselves.

None of this would be a disaster if the fares matched the lower quality – but they do not!

We compared fares on random dates in April to Berlin, Vienna and Marrakech with BA and on nine of the twelve combinations we chose, BA had seats available for lower fares.

BMI then make the fare comparison worse by offering some genuinely cheap fares available but only to selected groups. They have just emailed some Diamond Club members with vouchers to save 35% off any BMI Business fare in the next few weeks. They have offered flights in a one-day sale through Groupon at very good fares. The occasional deals that come up in their own monthly one-day “BMI Friday” sales can also be attracvtive. It looks as if someone in the company knows they need to boost their Business sales and that they will only do this by offering lower fares to match the lower quality. Unfortunately, the fares available to the everyday passenger just looking to buy a ticket are completely out of line with what is being offered.

We at Inside Traveller very much want BMI to survive as a UK carrier within the Lufthansa Group and, to do so, it will need to develop its European services. The path it is taking currently seems to be making all the mistakes they made in the past, together with a few new ones.

Virgin and Punctuality

Flightontime has just published its annual review of airline punctuality for 2010. As with all statistics, you really have to look behind the bare figures to get a proper understanding of what is happening. It is pretty silly to single out BMI Regional as the country’s most punctual airline – the airline flies to and from uncongested regional airports so it has none of the problems most other airlines have to face. Similarly, we think it rather unfair to pick on Jet2 as the least punctual. It is easy for some shorthaul airlines (especially budget carriers) to massage their figures because they simply cancel flights when they are faced with a delay. Jet2 makes a serious effort to carry passengers to their destination. What would you rather have – a delay of two hours on your flight from Newcastle to Murcia or an offer of a refund and a flight next Tuesday?

However, there are some pretty obvious trends you can pick out of the tables and we are surprised no one has picked up on the very poor timekeeping by Virgin Atlantic.

They come in at 26 out of 30 at Heathrow ahead of Air India and Turkish Airlines. At Manchester, they are number 30 out of 35 and 28th out of 30 at Gatwick just ahead of Libya’s Afriqiyah Airways. These figures are fractionally worse than last year but Virgin were fairly low then as well. To be fair, a delay of 45 minutes or so on a ten-hour flight might not be the end of the world but, other carriers can leave on time so why not Virgin?

The Joy of Tweeting

Having a Twitter account is not just for internet junkies but can be a valuable additional tool for travellers. As we have said several times in Inside Traveller, it can be a little like knowing the Chairman’s secretary at a major airline or hotel chain. Travel companies are anxious to take advantage of the new social media and those in charge of Twitter and Facebook pages are generally fairly well-connected within their organisations. As well as interacting with customers, they are also anxious to ensure that their company’s reputation is maintained. During last December’s snowstorms many people took advantage of Twitter to contact their airline and get faster and more personalised help than would have been the case through a normal call centre.

The other day I had the opportunity to put our advice into action. I had a problem reserving a ticket through BMI’s Diamond Club so a quick tweet to @flybmi.com and my problem was passed on to a supervisor who called me and was able to resolve the issue without difficulty. In fairness, I could probably have phoned Diamond Club myself but, since the issue was a little complicated, I am sure it would have taken much longer to sort out.

BMI’s Social Media people are rather more active than some but I strongly suggest following all your regular airlines and hotel companies. Not only will you receive news of any special deals as they are made available, you will someone to call on if it all goes pear-shaped.

Meanwhile, a big thank you to @flybmi.com

The butchery begins at BMI

So Lufthansa’s recent acquisition goes under the knife. The Times is reporting that 600 jobs will be going as well as well as a number of routes. The airline will cut the number of aircraft in its mainline fleet from 39 to 30 and will end services from Heathrow to Brussels, Tel Aviv, Kiev and Aleppo in January. Its Heathrow-Amsterdam service (its first international route from Heathrow) will shut in March and seasonal services to Palma and Venice will not be restarted next summer. Particularly noteworthy is the closure of Tel Aviv, which had been receiving double daily flights since May this year, and had apparently been profitable since its launch in March 2008.

Cynics amongst you might suggest however that this just par for the course and continues BMI’s own chaotic approach to route development. This has regularly seen supposedly profitable routes (for instance to Chicago and Las Vegas) pulled within a couple of years of starting.


Light at the end of the tunnel for BMI

As we predicted in Inside Traveller, Lufthansa have decided against selling BMI. Whilst they were forced to buy the airline, through an agreement made some years ago, they were able to get a major price reduction. Since February, the airline industry has come back from the brink and the possible value of BMI’s major asset – its large stock of slots at Heathrow – has increased massively since it now seems unlikely that a new runway will be built. We rather suspect that Lufthansa has got a bit of a bargain.

Now it just has the difficult job of sorting out the airline.

That is easier said than done. Sir Michael Bishop did a terrific job in keeping the airline going and maintaining and increasing its bank of slots. It was a brilliant attempt at keeping an awful lot of balls in the air but it was not a long-term strategy. Now Lufthansa have to decide what they are going to do to make BMI a successful operation in its own right.

Their first move has been to start some radical pruning at Bmibaby, reducing the fleet and concentrating on airports where they have a strong position, notably East Midlands.

No doubt the main BMI operation will face some similar surgery in the near future.

It won’t necessarily be very popular but it is important that the airline survives as a genuine second force in British aviation so Lufthansa’s moves to sort out BMI should be welcomed.

BMI Stewardess Performs with Hooker

That is the title of one of a short set of videos produced by BMI which are now on YouTube so don’t blame us for being sexist.

Go to www.youtube.com/user/rudbyvidz to see all the clips

Aside from being vaguely amusing, these clips might just be a turning point for BMI. The company has had a torrid few years with its ownership in the balance, dreadful results and some really poor marketing. Maybe, just maybe, Lufthansa have managed to steady the ship enough for them to regain their sense of humour. If so, it can only be a good sign.