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bmibaby undertakes major restructuring programme

bmi CEO, Nigel Turner
bmi CEO, Nigel Turner
  • bmibaby undertakes major restructuring programme, as part of BMI restructure;
  • Reducing fleet by 30%, with potential staff reductions of 25%;
  • Network cuts remain unknown.

Now under the control of Lufthansa, bmibaby has announced a restructuring programme that will see it “focus its activities and efforts on routes where there are clear indications and prospects for future growth and development”.

Bmibaby Managing Director, Crawford Rix, commenced, “the aviation industry is facing its toughest time ever – it is experiencing record losses and remedial action has to be taken. bmibaby is no exception to this”.

He added, “We believe that having identified and by concentrating on the core business areas and reinforcing our efforts, we can ensure that bmibaby continues to provide its customers with the best possible competitive fares as well as an attractive range of business and leisure products.”

…part of BMI restructuring efforts

The move comes just two days after Wolfgang Prock-Schauer, former Jet Airways CEO, commenced as CEO of BMI, tasked by Lufthansa with the job of turning around the loss-making carrier (Lufthansa has taken BMI off the market, stating it is no longer in talks with buyers after an acceptable sale price was not achieved, with plans to concentrate instead on turning around the carrier). 

One of the restructuring priorities for BMI has been bmibaby, which was founded in 2002 to offer low-cost services from regional airports.

Flybe CCO, Mike Rutter, has expressed interest in acquiring parts of bmi, specifically bmi’s regional operations and domestic operations out of London Heathrow, with Mr Rutter describing Flybe as an "acquisitive airline”. He added that parts of bmi (ie bmibaby) could be a "potential fit" with Flybe’s existing operations.

Reducing fleet by 30%

Through the restructure, and as a result of further aircraft utilisation optimisation, bmibaby will reduce its fleet size by five aircraft in 2010 from the current 17 to 12 aircraft.

Shake-ups threatens 158 jobs; Unite concerned

The restructuring efforts will also potentially result in 158 job losses, equating to a 25% reduction in staffing levels (the carrier employs a total of 633 staff).

While ten pilot and 15 cabin crew positions will be created at East Midlands Airport (where the LCC plans to allocate additional capacity in 2010), 54 pilot and 82 cabin crew positions (for a total of 136 position) at Birmingham, Manchester and Cardiff Airports are “at risk” of redundancy, plus an additional 22 management and support positions at bmibaby’s head office facility and at the airport bases.

bmibaby has commenced discussions with staff and union representatives with a view to minimising job losses wherever possible.

Unite Union National Officer for Aviation, Brian Boyd, commented, “this announcement casts further doubt over the whole bmi group, as its new owners, Lufthansa, search for cost savings. Unite members are once again caught at the sharp end of business restructuring. We will [try] to ensure that compulsory redundancy is avoided.”

Network cuts remain unknown

bmibaby, which earlier this month announced plans to suspend two of its Spanish services, from Manchester to Malaga and Alicanta (on 14-Nov-2009 and 15-Nov-2009, respectively), did not reveal how many or which routes would be eliminated as a result of the capacity reductions.

The LCC currently operates to 30 destinations within nine countries.

Bmibaby existing route map: Nov-2009

bmibaby Background Information:

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