Bmi has gone a long way to achieving its aim of expanding into longer sectors with the acquisition of British Airways franchise BMED for £30 million ($58 million) in early February.
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"In one fell swoop we have achieved what would otherwise have taken us 10-12 years" Nigel Turner, chief executive, bmi |
The purchase, which was paid for in cash, came just weeks after a deal with Lebanon's M1 Group foundered at the last hurdle. Bmi had made known its interest in its fellow London Heathrow-based carrier before M1 entered into exclusive talks with struggling BMED early this year.
"We were able to move quickly once those came to an end," says bmi chief executive Nigel Turner, adding that the move accelerates bmi's goal of growing long-haul and medium-haul services and "refining" short-haul services.
"In one fell swoop we have achieved what would otherwise have taken us 10-12 years," says Turner. The deal provides bmi with eight daily Heathrow slot pairs. BMED, which flies to 17 destinations mainly in central Asia and the Middle East, operates three Airbus A320s and five A321s. Turner points out that both types figure prominently in bmi's fleet and there is commonality with IAE powerplants. Also attractive are five scarce delivery slots for A321s.
The deal signals a vote of confidence from bmi shareholders and Star Alliance partners Lufthansa and SAS, which have in the past indicated they are willing to listen to offers for their 30% and 20% stakes. "It was clear to all our shareholders that this was a good deal for bmi," says Turner.
BMED will continue its BA franchise operation for a transition period until the end of the summer season.
Source: Airline Business
