bmi chairman puts heat on BAA

The majority of airlines at Heathrow are fed up with being treated as second class citizens after “being charged through the nose” for Terminal 5, said bmi group chairman Sir Michael Bishop in a speech to the Aviation Club in London.The 30-minute notice given of delays to the long-planned moves of airlines around the airport was the latest chapter in a sorry tale of reputational disaster for the world’s largest international airport, he said.

And he warned BAA to redouble its efforts to ensure the same fate does not befall Heathrow East, the terminal being developed to replace Terminal 1 in time for the 2012 Olympics.

 

“We don’t place any blame for sins of the past at the feet of Ferrovial, so recently charged with the management of Heathrow. Indeed in the case of Terminal 5, the die was firmly cast long before the Ferrovial acquisition.

 

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“But events now continue to cause huge reputational loss at Heathrow. And I urge BAA to re-prioritise and redouble their efforts on the Heathrow East project and ensure its completion in time for the opening of the Olympics in 2012 with all the necessary functionality we require.”

 

Sir Michael said that despite severe problems at the airport over the last few years, bmi’s strategy of developing its mid haul and long haul route networks, coupled with tight cost control, had helped the airline to develop a strong position.

 

“Through our Blue Skies project, over the last four years £100m of costs have been taken out of the business. And whereas ten years ago our business was 100 per cent domestic and short haul European services, by last October more than 50 per cent of the routes flown by bmi mainline were to mid haul and long haul destinations. In 2008 almost 50 per cent of bmi mainline revenues will be earned from these routes.

 

“Now we have a more balanced, higher yielding route network which is starting to make the most of our asset base at Heathrow.”

 

Sir Michael also addressed the speculation surrounding bmi’s ownership, saying: “I can confidently say that bmi’s shareholders will not permit an event to arise through which the airline would become the subject of any opportunistic or under-valued approach.

 

“Whether bmi remains independent and grows through acquisition or whether the shareholders decide another course, we will not be bounced into any particular direction by comments from other carriers or the media.

 

“The future of the business will be determined with the best interests of bmi, its shareholders and staff being paramount.”


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