British Midland plc, the holding company of bmi, has acquired control of the Heathrow-based BA franchise airline British Mediterranean (BMED). bmi”s chairman Sir Michael Bishop, chief executive officer Nigel Turner and deputy chief executive officer Tim Bye have been appointed to the BMED board with immediate effect. David Richardson will retain his position as chief executive reporting directly to Nigel Turner. All existing non-executive directors of BMED have today resigned their positions.
An agreement reached with British Airways will ensure that franchise arrangements and any other commercial agreements will continue until the end of the summer during the transition period. bmi says that a comprehensive review of the business will take place over the next 30 days but it is likely that most of the routes will continue, at least for the short term, the aircraft re-painted in bmi colours, and the staff in new uniforms.
Nigel Turner, chief executive officer of bmi group, said: "Bringing BMED into the bmi group creates a business with a turnover in excess of ”1bn with substantial growth opportunities. The acquisition enables the bmi group to accelerate its strategy of expansion into medium-haul markets. BMED operates to 17 destinations in 16 countries and has no overlap with any current bmi route. Many of these destinations have restricted access to the market due to existing bi-lateral agreements. Synergies include BMED”s Heathrow base and the fact that it operates IAE-engined Airbus A320 and 321 aircraft in a two-class configuration."
BMED has a fleet of three Airbus A320 and five Airbus A321 aircraft (with two more due). Its two-class product is not dissimilar to the upgraded operation bmi uses on its new Moscow route. bmi is the second largest operator at Heathrow with 14% of the slots. The acquisition will strengthen its position at the world”s most important international hub. Assuming most of the routes are taken up, bmi”s purchase of BMED will be a real coup for Star Alliance, homing in on many destinations that were BA only from the UK.