14-Apr-2010 11:03 AM

bmi is 'here to stay'; losses to halve in 2010: CEO

bmi CEO, Wolfgang Prock-Schauer, stated the carrier "is here to stay", adding there is no intention to break up the carrier (Dow Jones, 13-Apr-2010/Times Online, 14-Apr-2010). Mr Prock-Schauer, who took up the position as bmi CEO in Nov-2009, also outlined the following regarding the carrier's operations and focus for 2010:

  • Financial results: Mr Prock-Schauer stated losses in 2009 would be worse than the pre-tax loss of GBP157.3 million recorded in 2008, but a restructuring programme would help halve losses in 2010;
  • Ownership: The carrier is no longer in talks regarding a potential sale with Lufthansa to focus on a restructuring effort at the carrier. Although Mr Prock-Schauer conceded that Lufthansa could decide to sell the airline at some point;
  • Restructuring efforts: As part of the aggressive restructure programme, the carrier plans to achieve GBP100 million in annualised savings (although only two-thirds of that will be realised in 2010). The restructuring will refocus the carrier's network, reducing capacity by 20%-25% in 2010, eliminating 800 jobs, most of which already have been identified, and returning unwanted leased aircraft once contracts expire;
  • bmibaby: Mr Prock-Schauer stated he wants bmi to retain its LCC subsidiary, bmibaby, due to increased competition from LCCs in the European market;
  • Branding: Lufthansa plans to reintroduce the British Midland name, stating it will be more attractive to foreign passengers than “bmi” (Times Online, 14-Apr-2010). The British Midland name was previously changed in 2001 because it was believed to be too “parochial” for foreign passengers;
  • Ancillary revenues: Mr Prock-Schauer stated he sees opportunities in expanding ancillary revenue across the group by charging for certain services, although no specific details were provided;
  • Network: Mr Prock-Schauer stated he wants bmi to expand routes to the Commonwealth of Independent States, Africa and in Continental Europe by operating into hubs of alliance partners and feeding passengers to other destinations. He also intends to expand services in the Middle East and target the oil and energy community there and in Aberdeen (Scotland).

Want More News Like This?

CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More