BMI British Midland is launching a low-cost airline from East Midlands Airport in response to the decision by no-frills carrier Go to make the airport its third UK base in May.

BMI will launch the carrier in March with two 148-seat Boeing 737-300s transferred from BMI, and fly to Palma, Barcelona, Nice, Malaga, Faro and Alicante - most of the destinations Go already serves from its London Stansted and Bristol hubs.

The new airline will have its own brand which will be unveiled this week, and will recruit its own staff, although BMI employees may take up positions with the new airline. It will focus on point-to-point services and charge for in-flight catering. BMI says it has an agreement with East Midlands Airport over airport charges which will allow it to launch low-fare services.

The new airline will initially focus on the leisure market, but BMI says that "further route development may take place from the existing portfolio of BMI Regional or by the addition of new destinations".

Rival low-cost carriers have greeted the BMI news with bemusement. Go, which is about to name the routes it will serve from East Midlands, has dismissed BMI's move as one of an "airline in disarray...this tactic was tried many times in the US and failed every time", says chief executive Barbara Cassani. Ryanair chief executive Mike O'Leary sees the move as "a late, kneejerk reaction", while EasyJet chief executive Ray Webster says that a low-cost carrier cannot be created from a high-cost operation.

Source: Flight International