After a few months of hemming and hawing, Lufthansa has finally started to make its mark on bmi. The airline announced a big restructuring that will involve cutting routes, moving airplanes around, and just generally aligning itself better with the growing Lufthansa empire.
When Lufthansa took control of bmi thanks to a previous agreement that made them pay a ton of money for the airline, the first plan was to sell it off. After it became apparent that they weren’t going to get the price they wanted (or even close to what they paid), they announced on November 2 that they would just try to get bmi into better shape on their own. It took them less than a month to bring out their plans.
This map was recently released showing what’s in store:
Oh wait, nevermind. That map’s about 70 years old, and as I recall, it didn’t work out so well for the Germans then. Of course, this version of Lufthansa didn’t exist back then, and their plans are actually far less, um, aggressive. As a reminder, there is bmi, which operates mainline aircraft out of London/Heathrow, and bmi regional which flies regional jets from other UK airports.
- bmi will go down from 39 to 30 airplanes. The fleet will now be made up of mostly A320 family aircraft with three Embraer 145s, a single A330, and a single 757. It wouldn’t surprise me to see those go away when the leases expire.
- bmi regional will see its number of regional jets rise from 15 to 17 thanks to bmi’s decision to send two back to bmi regional. bmi regional is looking to get rid of 3 of those airplanes, but nothing has happened yet.
- Flights from Heathrow to Brussels, Tel Aviv, Kiev, and Aleppo will end in January, but those cities will continue to be served by other Star alliance carriers via connections. The Brussels flights will instead operate under a codeshare with Brussels Airlines, another Lufthansa-owned airline.
- Flights from Heathrow to Amsterdam will go away in March.
- Seasonal runs from Heathrow to Venice and Palma won’t be coming back.
This is a pretty big cut in terms of aircraft flying, and that means that there will be plenty of unused Heathrow slots. Where will those go? Will they sell them off? Or will another Lufthansa-owned carrier pick up the slack? It will be very interesting to see what they do with those.
bmi’s strategy doesn’t look much different to me. They will continue to focus on Europe and the Middle East as they’ve been doing, but they’ll just have fewer airplanes doing it. There doesn’t appear to be any interest in London-US flying, so instead they’ll just look at how they can make bmi best fit into the Lufthansa puzzle.
20 comments on “Lufthansa Starts Making Changes at bmi”
Took me a while to work out what the map was all about – thought it was some new kind of fare structure for the new decade……
It would be no surprise if LH started selling off the bmi slots at LHR and effectively winding them down. Likely the reason they haven’t done this yet is because the LHR slot prices have taken a significant tumble recently and LH probably believe they’ll get more if they wait it out a bit.
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The choice of routes that have been cut by bmi is partly influenced by LCCs. In particular, EasyJet recently announced a London-Tel Aviv route, and have a substantial number of flights to Amsterdam and Palma year round. Easyjet and Ryanair both fly London-Venice double daily. Wizzair recently launched London-Kiev
The London-Cairo route on the other hand doesn’t have any LCC competition – and also has the benefit of EgyptAir being a Star member.
Looks like the main mid-haul flying will be to central Asia, the Middle East and bits of Africa, while short-haul will be focussed either as Star feeder flights, or UK regional
Any ideas when they’ll make a decision on BMIbaby? The Times article you link to predicts that they could sell it.
And would you advise someone to book a bmibaby flight for next summer now, or to wait and see if that route’ll be running?
I would think LHR slots are to important and valuable for LH/BMI to give up any. Having other Star Alliance carriers use them makes more sense if LH has no use for them on their own.
It’s interesting to note that these route and aircraft cuts come alongside substantial changes to the frequent flier program (Diamond Club). This may suggest that Lufthansa does see a future in operating bmi as an independent carrier for the time being.
I was also surprised to see that Tel Aviv is being axed completely (and abruptly), less than a year after bmi added a second daily widebody to that route.
London is the second most profitable market from Tel Aviv (after New York). For years, it had been served by 2 daily flights by British Airways (currently one 767 and one 777) and 2 almost-daily flights by El Al (mixture of 767, 777 and 747; almost daily because El Al doesn’t operate on the Jewish Sabbath), in addition to numerous charters. In March 2008, bmi entered the market with a daily A330; I would guess that it performed well, because they added a second daily frequency in March 2009. But then in May 2009, El Al added a third almost-daily frequency (to Luton, presumably because a third Heathrow slot was too expensive; the 6x weekly to Luton also replaced El Al’s weekly flight to Stansted, which had been in place because El Al couldn’t get a second morning slot at Heathrow for its Sabbath-observing early Friday morning flight). Then in November 2009, easyJet started a 6x weekly flight from Luton. My guess is that these pushed the bmi flights below profitability.
My guess is that bmi suffers from not being able to compete at either the high end or the low end of the origin/destination market, nor having the vast opportunities for connections to North America offered by British Airways. They do offer interline connections on United, Virgin and Air New Zealand (perhaps others), but this may not as profitable. Another possible factor is the entry of US Airways into the Tel Aviv market in summer 2009, combined with Continental’s shift to the Star Alliance in October 2009, which may have reduced demand for Star Alliance flights from North America to Tel Aviv with a connection in Europe.
I would think that the axing of Tel Aviv has to do partly with the decision to get rid of the A330s altogether. I wonder if they could have made it work with the remaining aircraft.
Seems to me that bmi is sliding towards a company that owns LHR slots with small side business in flying planes.
I think bmi is only relevant anymore in terms of ground handling services LHR for star carriers, those precious Heathrow slots and perhaps some elements of the diamond club.
Simon wrote:
I have no clue. That’s an airline that seems to me to just be sitting on the chopping block, but who knows. Regarding booking for next summer, I’d be a little wary. Is it a route that other Lufthansa airlines could fly even if it involved a connection? Then I wouldn’t worry at all.
Ron wrote:
Good break down of the Tel Aviv market. I tend to think that it all came together to make this route one to kill off.
There is where those slots are going, expanding service for LH carriers like SWISS and Lufthansa Italia.
http://www.airportbusiness.com/online/article.jsp?siteSection=1&id=32608
Also, the 757 was leased in May of 2008 for a two year period so that will expire in May of 2010.
While LH doesn’t appear to be interested in London-USA flying, they should at least add some flights in the future to some of the Star Alliance hubs that lack a London connection like Charlotte, Denver [at least during this winter] and Phoenix. Boston would be a good market as there’s no dominate carrier and Jetblue could provide some feed.
Zack Rules, Albany, NY wrote:
That link isn’t working for me – is there anything there beyond what you’ve already said? Thanks for forwarding the info.
I would be surprised if Lufthansa did anything from London to the US. There are reasons that those markets don’t have London flights – Lufthansa isn’t adding connectivity in London over what bmi had, so I imagine these just won’t work. Heck, they can’t even make PHX work from Frankfurt!
The latest announcement isn’t even the half of it – it’s a culmination of a gradual ramp down in bmi service over the last year or so, a sort of “death by a thousand cuts”, that has seen a gradual withdrawal from a number of UK and international business trunk routes ex-LHR. The pattern to date has been:
(1) significantly reduce frequencies (e.g. AMS used to be 8-9 flights a day, now cut to 4; LBA went from 5 to 2, etc) or downgrade aircraft (e.g. BRU went from 6x 319s to 4x ERJs)
Followed by (2), surprise, surprise, cancel route, claiming lack of demand
Then (3) LH miraculous finds convenient slots to launch 6x daily LHR-MXP or 3x daily LHR-TXL or 6x daily LHR-GVA or whatever – the same type of slots that cost CO over $50m per pair last year
Oh, and there’s also plenty of slot-sitting going on too – some days there are 10-11 scheduled flights to MAN, with 2-3 leaving within an hour of each other – not much better than the ghost flights bmi was accused of in the past (http://news.bbc.co.uk/1/hi/uk/7509732.stm)
Meanwhile, all the routes I used to deliberately choose bmi as a loyal, goldcard-carrying bmi traveller based in London are going or gone – AMS, BRU, CDG, MAD, LBA, JER to name but 6
Very sad indeed, and the history of European acquisitions of full service UK airlines with London hubs does not bode well for bmi… (c.f. Air UK -> klm uk -> buzz -> Ryanair http://en.wikipedia.org/wiki/AirUK)
@ CF:
http://www.dailymail.co.uk/money/article-1230972/Heathrow-sales-throw-bmi-lifeline.html
Here’s a better story than that other one. Essentially, SWISS bought 6 slots from bmi for 60m pounds. bmi is even operating one of the flights for SWISS.
kt74
The Paris and Brussels flights formerly offered by bmi were eaten away by the Eurostar service via the Chunnel. It’s little wonder as I took the Eurostar the past summer from London to Paris in Leisure Select class. I arrived at St Pancreas with 30 minutes to spare, going through security quickly and was also pre-screened by the French. I was served an excellent salmon dinner with a nice glass of wine. Hotel to hotel took a little over three hours. Airlines can’t compete with this on shorthaul flights.
Love the picture :)
@Zack Rules
Eurostar is all very well for tourists who want to get from Central London to Central Paris (I notice you were travelling on Leisure Select, rather than at full fare). It was virtually bankrupt two years ago, and the owners were forced to sacrifice equity stakes to their creditors – even bmi and BA haven’t done *that* badly. As a service, it is not much use if you don’t live in Central London or want to get to somewhere outside of Central Paris. You’ll notice that AF has just increased its frequency from 7x to 9x between LHR-CDG. Eurostar has also been around for 15 years (albeit only at the current speed for the last 2) and cannot explain the disappearance of bmi services to AMS or anywhere else. It’s also only 2 hours by train to MAN, yet bmi have doubled frequencies on certain weekdays in December. Nope, can’t blame trains for irrational management behaviour at bmi…
Ron wrote:
What are the substantial changes to Diamond Club?
RL wrote:
Let’s see: electronic upgrade vouchers replacing paper ones; mileage upgrades (were not available up till now); household accounts; redesign of the cards. This is just off the top of my head — there’s probably more.
@ Ron:
Oh, OK. I thought I’d missed some ‘enhancements’
@ kt74:
They are probably adding MAN flights to protect the slots
@ The Boarding Pass
Yes, thanks, I had worked out it was most likely to be slot sitting on a massive scale (followed by several last minute “cancellations for technical reasons” perhaps?). You’d think they could slot-sit to some of the places that we passengers want to fly to…
However you put it Lufthansa remains one of the leading airlines!