BA Owner Tables Offer For BMI

From SKY News

http://news.sky.com/home/business/article/16089102

[Darren Wheeler]

I don't think they would be allowed to by BMI as it would be anti-competative.

Lets be honest, it's nothing to do with buying BMI, just an ugly slot-grab

personally don't see competition as an issue really...

IAG group, even with the purchase of bmi, would still have a lower % of slots at LHR than say the LH group at FRA, or AF/KLM at CDG/AMS.

What would this mean for VS feeders though if it were to go ahead?

No surprise there, now expect VS to bleat about competition ... then recall just how long VS has been mithering about BMI!

I've said before, BA has got a pretty good case under European competition law to defeat any challenge ... that said, expect that they won'y get 100% and some slots will swing by. Maybe that is VS's (failed) strategy - unless we see a counterbid!

Not sure how slots work but obviously you need two per flight - one in and one out

Lets say BMI have 20 LHR Slots so 10 round trips. Are these slots linked to particular destinations (e.g. LHR-MAN or LHR-MAD or can they be used to go anywhere? So could VS use them for say LHR-YVR (assuming they can get access into YVR of course!) ??

VS has missed the boat by miles here.

http://www.ft.com/cms/s/0/bc728250-f67a ... ab49a.html Looks like Virgin may join forces with Etihad for bmi - Etihad already have a relationship with Virgin Australia. Hope they can work something out

No surprise there, now expect VS to bleat about competition ... then recall just how long VS has been mithering about BMI!

I've said before, BA has got a pretty good case under European competition law to defeat any challenge ... that said, expect that they won'y get 100% and some slots will swing by. Maybe that is VS's (failed) strategy - unless we see a counterbid!

the uncertainty continues, as do the the conspiracy theories:
Yep VS will be silent, during talks to be bought out, off loading their man/LGW/LGW routes to a package firm be that VH or others, whilst hanging onto LHR slots for further alliance with Arab based carrier.... Eitherway becoming boring waiting for an answer, lack of VS communication hInts at bad news.....

The more I think about this the more I think VS and bmi are not a good fit.

If feeder traffic was so important to long haul routes, BA would still be flying from DUB, BFS and INV to LHR for a start!

To take one loss making airline (bmi) and merge it with another airline that's describing the market as "challenging" (VS) does not make sense.

I think Virgin's strategy is to be silent now, then make a lot of noise about competition and slots, ensuring that when bmi is carved up (as surely it will be) VS gets a decent wad of slots without the hassle of running bmi.

Why would VS need to run BMI? Surely 80% of the value of BMI is in the LHR slots, which is what BA/VS etc are ultimately interested in.

Why would VS need to run BMI? Surely 80% of the value of BMI is in the LHR slots, which is what BA/VS etc are ultimately interested in.

Because those slots have to be used 80% of the time straight away otherwise they will have to be forfeited. Any buyer will have to maintain the bmi operation whilst it is integrated.

bmi is important to IAG but I don't see them buying at any price. The losses at bmi over the past three years have been horrendous and are a salutary reminder that a large number of Heathrow slots alone do not make a business model.

Any acquisition will require an extremely swift integration to stem the losses. BA has a large short, medium and long haul network to integrate bmi into. Virgin doesn't and buying bmi on their own is just too much for them to swallow. I don't think they have the funds, systems or management expertise to transform themselves from a largely point to point carrier to a network carrier in the very short time bmi's dire financials would require. The cynic in me questions why the very vague details of an Eithad partnership only leaked after the IAG bid.