Bmi british midland will hand its base at East Midlands Airport over to the no-frills bmibaby operation by 27 October, while preparing to launch another low-cost base at Cardiff Airport.

It is 10 months since bmi's chief executive Austin Reid first said he would respond to the low-cost threat, and the rapid advance of bmibaby is the most prominent element of this strategy. But bmi will still compete in the full service market, and there are no plans at present to hand over more operations to bmibaby.

Bmi will transfer its remaining Boeing 737-300s to bmibaby, with nine aircraft based at East Midlands and two at Cardiff. Bmibaby was launched in March, and will serve 23 destinations from East Midlands by year-end. It will fly nine routes from Cardiff when that base starts up in October. The aim is to carry two million passengers next year at East Midlands, with a further million at Cardiff.

"An opportunity exists for us to develop the low-cost part of our business at a time when the industry faces considerable competition and lower fares," says Reid. He describes bmibaby's East Midlands and Cardiff build up as laying a "sound foundation" for growth.

Source: Airline Business