ATW Daily News

Bmi announces fleet, route, job cuts

Thursday November 26, 2009

Bmi yesterday outlined a major restructuring of its mainline and regional operations, including suspension of unprofitable routes, reduction of its mainline fleet by nine aircraft to 30 and around 600 fulltime job cuts.

The manpower reductions equate to approximately 13.5% of bmi's workforce of 4,470 and will impact all areas of the business. "Further job cuts cannot be ruled out," the airline warned. The moves follow the bmibaby shakeup announced three weeks ago (ATWOnline, Nov. 5).

It said the overhaul "takes place against a background where the airline industry is facing the challenges of a downturn in demand and the worst recession in the UK since records began," while noting that in addition to cost-saving initiatives, the program includes a wide range of revenue enhancement programs and efforts to leverage synergies with parent Lufthansa and other partner carriers "in all areas." Bmi posted a net loss of £148.1 million ($245.4 million) in 2008 on revenue of £1.04 billion. Operating loss including exceptional items neared £160 million.

Wholly owned by LH since July, bmi will return two A321s and three A320s when their leases expire next year. It will not extend the leases of two of its three A330s in the first half of 2010 and thus continue to serve mid-haul markets with one wet-leased 757-200, one A330 and its fleet of A321s.

Mainline fleet reductions also include the return of two of five Embraer aircraft to bmi regional. The regional operation therefore will have three surplus aircraft. It said it "is in discussion with potential customers with a view to mitigating this situation." The company noted that bmi regional has maintained a viable operation through its niche market position and a long-term charter agreement with Airbus, although it is "feeling the impact of a prolonged downturn in business-type travel."

Mainline route closures include services from London Heathrow to Brussels, Tel Aviv, Kiev Boryspil and Aleppo in January and to Amsterdam at the end of March. Seasonal flights from LHR to Palma and Vienna will not be reinstated next summer

"Once stabilized, the business can then be grown again in the years ahead when the economic environment improves and market demand justifies it," bmi stated.

by Cathy Buyck

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