I have always liked British Midland (BMI) and its various incarnations. Owned by Lufthansa since 2009, the loss making BMI is now up for sale.
I really hoped Virgin Atlantic would be the buyer of BMI or a Virgin/ Etihad combo would hop in with an offer. Vigin have had an interest in BMI off and on since 1999. The Virgin and BMI route networks would mesh well. Etihad are clearly looking for expansion by takeover. The major issue is that BMI is losing a lot of money. Virgin and its 49% owner Singapore, would not be keen to take on a loss making subsidiary although Etihad would be a little less concerned.
Unless Virgin and or Etihad act fast, then it looks like International, Airlines Group, the owners of British Airways and Iberia will buy British Midland. If that happens, I can’t see BMI remaining as a stand alone operation, although Willie Walsh, CEO of IAG has denied any plans to close BMI. There would definitely be rationalisations:
- It is likely that BMI would leave Star Alliance for One World
- Some BMI routes would be rationalised and some closed
- The BMI Diamond Club frequent flyer scheme would be folded into the newly announced IAG Avios points scheme
- BMI owned lounges would be meregd into BA’s lounges
- The IAG/BMI combined airline would take on all of BMI’s coveted London Heathrow landing slots, although what the authorities will think of IAG controlling 53% of all landings at Hathrow, I am not sure
Virgin has a meeting with Lufthansa this week. Watch this space!