British Airways and bmi: two years after integration, BA has grown some services, reduced others
British Airways and parent company IAG are both ahead and behind on their incorporation of bmi, acquired in 2012 with integration commencing later that year. Financially, BA is ahead, with bmi contributing about GBP30 million of profit in 2013 (all earned in 2H2013) from a previous estimate of a GBP50 million loss. BA looks well on schedule to meet its original goal of having bmi contribute EUR100 million (GBP83 million) of profit in 2015.
But that stronger financial performance may indicate BA has not moved to open new long-haul destinations as quickly as previously implied . Such additional points carry substantial start-up costs but can offer larger profits, helping BA and IAG meet their commitment for better return on capital. Since northern winter 2011/2012 BA has opened from Heathrow only three long-haul destinations: Austin, Chengdu and Seoul Incheon. No others have been publicly announced despite BA highlighting the medium and long-haul growth opportunities bmi would bring - although this was always a long-term objective.
The largest changes to the former bmi operation are decreases to three domestic routes (Aberdeen, Edinburgh and Manchester) - although Virgin Atlantic has more than backfilled capacity. BA has also cut a number of bmi's North African routes while expanding to a number of European points, no doubt a slot holding exercise until long-haul opportunities are able to be realised.
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