Airline blames rising fuel costs and airport charges
bmi has reported a record loss of £99.7m ($137m) last year down from a £7m profit in 2007, prompting further cost cutting measures.
In an unaudited trading update released today (March 12), the airline said it planned to save an extra £45m from its budget through capacity cuts and a staff pay freeze.
bmi's chief executive Nigel Turner blamed £60m in fuel costs and £12m in airport charges at Heathrow following a CAA settlement in favour of BAA.
"bmi's 2008 results were hit by the unprecedented and extremely challenging market conditions reported throughout the airline industry," he said.
Mr Turner said the "chaotic" opening of Heathrow's Terminal 5 had delayed improvements to airport facilities.
"Not withstanding these challenges, bmi maintained a very high performance of punctuality well ahead of the major carrier at the airport," he added.
The carrier has already reduced capacity on most routes and last month announced the suspension of several domestic and short-haul European services.
Long haul services from Heathrow to Chicago were suspended in January, with more Atlantic routes due to end after Easter.
bmi said it is engaged in "constructive negotiation" with unions to institute a pay freeze for 2009.
Mr Turner added: "We have taken steps to review all areas of the business to control costs and conserve cash against the continuing economic weakness in 2009."
In October, bmi's founder Sir Michael Bishop exercised an option requiring Lufthansa to buy 50% plus 1 share in the airline.
Lufthansa said it intended to fulfil its agreement with Sir Michael, pending EU anti trust approval and CAA consent.
bmi said the approval process is "well advanced" and anticipated the transaction to close in the second quarter of 2009.
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