Flybe gains access to Heathrow with Scotland remedy slots

There are different types of BNI referrals. The airline carried 7. Seasonal routes from London Heathrow to Palma and Venice were also discontinued. Any point in Europe; outside Europe: The medium-term integration will commence in and by IAG expects the vestiges of bmi to contribute, perhaps optimistically, EUR million of profit. Longer-range aircraft such as the ER or could operate the route non-stop but would probably provide too much capacity in the current environment.

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The company was also contracted by Rolls-Royce to transport aero engines to customers all over the world. In , Derby Aviation formed Derby Airways as its airline business and introduced a new livery incorporating the new airline's name. Domestic scheduled flights within the United Kingdom began the same year. The corporate colours of blue and white were adopted at that time, along with the first turboprop aircraft, a Handley Page Dart Herald.

Minster Assets, a London-based investment and banking group, acquired the airline in , and in promoted former Mercury ground handling manager Michael Bishop to become the company's general manager. The former had been intended to be primarily used on European inclusive tour IT charters while the latter was to be mainly used on transatlantic "affinity group" charters.

Following his appointment as managing director in , Bishop withdrew the One-Elevens from service, two of which were swapped for three Handley Page Dart Heralds while the third was subsequently leased to Court Line.

This resulted in BMA concentrating on regional, short-haul scheduled services and ad hoc charters using turboprops such as the Herald and Viscount as these were more economical than contemporary jets on short, thin routes. The success of the airline's wet lease operation resulted in an increase in the number of Boeing s allocated to this activity, including the addition of several later model B and C aircraft from All of these were leased to other operators, with none operating for BMA on scheduled or charter services until The first flights departed Larnaca on 10 February On 1 September , jets began gradually replacing the turboprop fleet on most of BMA's domestic and European services, when the airline's first Douglas DC-9 a second-hand leased from the manufacturer replaced Viscounts on the Heathrow—Tesside route.

In , Minster Assets sought to sell the company. With the help of a Californian entrepreneur, Robert F. Within a year or two these were replaced by the DC9 15, and following the extension of the runway at Leeds Bradford, the DC9 32 became the standard equipment on the route supplemented by the 15 series and at weekends the occasional Viscount, Fokker F27 or BAE ATP turbo prop.

When the DC9s were phased out, the Boeing became a regular on the Heathrow route, and later the , , and were all operated prior to the arrival of the newly acquired Fokker , which again was supplemented on quieter rotations by the smaller Fokker Eventually the Airbus A became the standard equipment to Heathrow, but busier rotations saw the larger A and occasional A too.

At its peak, British Midland operated up to 6 flights each way to and from Heathrow from Leeds Bradford, the final late-evening flight being operated on a smaller Embraer Regional Jet. In the airline dropped the route, which they had operated unbroken for 29 years. The Secretary of State 's decision to overturn the CAA's ruling enabled the airline to commence its first domestic trunk route from the UK's premier airport on 25 October , when it launched six daily return flights between Heathrow and Glasgow operated with DC-9s.

Although these flights were not as frequent as the competing hourly BA shuttle, BMA offered keener fares and a full in-flight service compared with the no frills shuttle.

In October , the Boeing fleet was withdrawn, having been used extensively on lease operations for other airlines across the world. In , a new aircraft livery featuring a dark blue upper half and tail, with a light grey lower half separated by a thin, white stripe, was introduced. At this time, BMA was branded simply British Midland , and a new logo featuring a stylised red BM crowned with a white diamond shape appeared on aircraft tailfins.

However, the logo on the aircraft's fins remained unchanged. The conclusion of the first fully liberalised bilateral air transport agreement in Europe between the United Kingdom and the Netherlands in , as well as a legal technicality exempting the airline from the "London [Air] Traffic Distribution Rules" a government policy that sought to compel all airlines that were planning to operate an international scheduled service to or from Heathrow for the first time to use Gatwick instead as a result of having operated a Heathrow— Strasbourg scheduled service prior to this policy coming into effect on 1 April , enabled BMA to compete directly with BA between Heathrow and Amsterdam from 29 June This resulted in BMA becoming the first private, independent airline to compete with then wholly government-owned BA on an international trunk route from Heathrow.

The Diamond Club frequent flyer programme FFP launched on 1 October , coinciding with the introduction of an enhanced business class style, single-class Diamond Service featuring a full meal and free onboard drinks service for all passengers, regardless of the fare paid, as well as airport lounges at the airline's major UK destinations.

British Midland operated its final Viscount flight on 20 February , 21 years after the airline had first operated the type. In , British Midland became the first airline to offer a vegetarian choice of in-flight meals on UK domestic flights and one of the first in Europe to do so on domestic services.

The following year, the airline introduced Diamond EuroClass on its European routes, the first time it had offered a separate cabin for business travellers.

Initially, Diamond EuroClass was competitively priced, with the highest fares being the same as rivals' published economy class fares. On 30 September , British Midland began offering Diamond EuroClass on all its domestic routes, becoming the second airline in the UK after Jersey European Airways which had pioneered business class on UK domestic routes in to offer a separate cabin for business travellers on domestic routes and the first to do so on domestic trunk routes from Heathrow.

ABH became British Midland Plc in , when it was de-merged as part of major corporate restructuring. Aircraft received a new livery of royal blue, white and a fading Union flag on the tail, along with the new lower case BMI logotype.

Bilateral restrictions implemented in the Bermuda II agreement meant the airline could neither fly its own aircraft to the US from its main base at Heathrow nor sell tickets on codeshare flights operated by Star Alliance partner United Airlines from the airport, as had been planned.

Initially, the new As operated both routes; however, the Washington service was subsequently downgraded to a narrowbody operation using a Boeing leased from Icelandair before being axed in The airline carried 7.

Services to Riyadh followed, commencing on 1 September , after British Airways ceased to serve Saudi Arabia earlier that year. BMI also launched a scheduled service to Moscow Domodedevo in co-operation with Transaero Airlines on 29 October , which used a dedicated A aircraft G-MIDO with special seating for the service, including leather seats and a 40" seat pitch. In the airline launched non-stop services from its Heathrow hub to Cairo and Amman , raising the airline's profile in the Middle East significantly.

The two Airbus A aircraft based there were moved to Heathrow. It can therefore be argued that the EC's decision to legalise this practice made BMI an attractive takeover target for other Heathrow-based airlines and helped it avert bankruptcy. In November , following the complete takeover of BMI by Lufthansa, the airline announced a restructuring of its mainline and regional operations in an effort to suspend loss-making routes and adjust capacity.

The measures included a fleet reduction of nine aircraft from the mainline fleet two of which were operated by BMI Regional and the suspension of routes from London Heathrow to Amsterdam, Brussels, Tel Aviv , Kiev and Aleppo in Seasonal routes from London Heathrow to Palma and Venice were also discontinued.

On 12 January , BMI announced that the number of daily flights between Dublin and London Heathrow would be reduced from 28 March from six to four due to the economic climate, which depressed consumer demand.

This resulted in the closure of the Dublin base, which consisted of one plane and 33 cabin crew. In April , the airline announced it would begin using the British Midland International name, whilst retaining the BMI logo and continuing to be known by those initials in the domestic market.

This entailed aircraft downsizing replacing Airbus mainline jets with Embraer regional jets , frequency reductions and route cutbacks on the airline's loss-making short-haul routes from the airport, including axing its by then heavily loss-making Heathrow—Glasgow route from 27 March View our Privacy Policy Accept and close. Posted 20 December The airline will offer up to 25 return flights per week between Edinburgh and London Heathrow and up to 20 return flights per week between Aberdeen and London Heathrow with up to four and three daily rotations on each route, respectively.

Flybe says its new Heathrow operation will grow its inventory to up to 18 flights a day between London and Edinburgh, and 10 between London and Aberdeen. The domestic slots were originally allocated to Virgin Atlantic in and alongside its own slots at Heathrow were used to introduce domestic flights from Aberdeen, Edinburgh and Manchester under the Little Red brand using Airbus A equipment wet-leased from Aer Lingus. This operation failed to develop sustainable returns for Virgin Atlantic and was closed during However, according to the carrier, the demand had been predominantly in direct — point-to-point — customers rather than anticipated connecting traffic.

In fact our and our analysis of demand data suggested that as little as five per cent of passengers on the two routes from Scotland were connecting in London to Virgin Atlantic's wider network.

The European Commission stated in a brief that it will award slots to carriers without prejudice of their country or principal place of business. It will award slots based on which carrier can provide the most effective competition, favouring carriers that can fulfill two of three criteria: The European Commission is opening the possibility for existing operators to strengthen their presence or for new entrants to arrive, although it is not clear which new carriers could serve these routes.

The EC appears likely to favour a number of operators to assume the 12 slot pairs, although Virgin Atlantic is now lobbying for the dozen to be auctioned together in order to maximise the leverage a competitor such as itself could have against IAG. While Virgin Atlantic was still lobbying to buy bmi, it pledged it would not use bmi's slots exclusively on long-haul routes and offered the launch of a domestic operation.

They have said they would start flights to Scotland. They now have the ideal opportunity. Virgin had never discussed general details of how it, a widebody-only operator, would make this work, although Virgin Atlantic briefly in past decades did operate Airbus narrowbody jets for leisure routes, since withdrawn. Virgin is unlikely to want to enter Nice but could be considering the other international points.

The prospect of Virgin entering short-haul markets poses a significant quandary: That achievement has plagued its legacy competitors across Europe. European legacy carriers this year are turning a serious eye to restructuring their loss-making short-haul networks. The proposed solutions so far are to strip down service to compete with LCCs.

The latest restructuring, Iberia 's creation of Iberia Express , has a tight pitch, no free food or drinks in economy and no free checked luggage for those on the cheapest economy fares. While such low, non-existent frills are not synonymous with the image Virgin Atlantic has portrayed of itself being focused on service, the Virgin Group does have lower-cost short-haul experience with Virgin America and Virgin Australia.

Both however, required significant investments in markets more likely to offer profitability. For all the changes occurring with legacy European carrier's short-haul networks, it is too early to see if the carriers can achieve a profitable short-haul operation. Virgin Atlantic has subsidised well without its own direct feed, using interlines with bmi and British Airways in fact, British Airways interlines are understood to have contributed to Virgin more passengers than from bmi.

The days are long past for an airline to operate a European short-haul network for pride alone. The EC has stipulated that any carrier that increases capacity on one of the designated routes Aberdeen, Cairo, Edinburgh, Moscow, Nice or Riyadh can enter into a "fare combinability" agreement with IAG.

This will allow the other carrier to sell IAG flights on the route, increasing its schedule proposition and, hopefully in the eyes of the EC, increase competition. The EC has not stipulated if this is to be an interline or codeshare arrangement but that IAG flights may comprise only one direction of travel. The EC stipulates the roundtrip fare should be half of IAG's and half of the other carrier's and allow for recovery of fuel surcharges.

Fares are not allowed to be "less favourable" than any agreement the other carrier presently has with IAG. Agreements are to be in force for five years and monitored by an independent party. The rates are applicable for carriers linking a relevant short-haul point anywhere in Europe as well as a handful of points in West Asia, the Middle East and Africa — many of which bmi served with a relevant long-haul point.

Exceptions are made for carriers which on their own or through alliance partners that have a hub in a "Category II" city: Exceptions are also made for carriers with, either on their own or with partners, a hub in London and "Category I" cities. However, since no carrier aside from British Airways and Virgin Atlantic has a hub in London, this is for now a moot point. It will, however, have an effect on Virgin Atlantic in the likely event it joins a global alliance.

Curiously, Atlanta is not considered a Delta hub for the EC's purposes. While transfer traffic has not been a mainstay of Virgin, which has relied on the strong local London market, as alliances and joint ventures have proliferated Virgin has been left without equal partners and has lost revenue synergy opportunities.

It will need a new strategy going forward, and better incorporation of transfer traffic will need to be an element. While this is fair to not force IAG to have a relationship with a strengthened competitor, it does return to the origin of Virgin's problem that it lacks both feed at London as well as growth opportunities. This clause largely assures Virgin Atlantic that its interline agreement with IAG can continue so long as Virgin does not join an alliance.

While Virgin Atlantic had lampooned the sale of bmi to IAG, saying it stood to lose all of the feed bmi provided it, British Airways had been a far larger source of network feed for Virgin. Nonetheless, Mr Walsh seized the opportunity to spin the concessions, telling The Guardian: Carriers are assured of securing similar rates as they previously had with IAG or bmi, and agreements are valid for an initial five years with rolling one-year extensions.

The EC prescribes that any carrier aside from oneworld members or carriers affiliated with oneworld members that increases service on designated routes and which does not have its own frequent flyer programme FFP can be hosted in IAG's FFP for the designated routes. Given the proliferation of FFPs this is unlikely to come into use. London-Amman is the only route that will become a oneworld monopoly following bmi's incorporation into IAG. This would not be a welcome development for Royal Jordanian.

Of Europe's four major long-haul carriers, only BA in carried fewer passengers than in BA's reasons for carrying fewer passengers are varied but include its decision early last decade to focus on carrying more premium travellers and fewer economy passengers in order to increase revenues in the absence of hub growth. This focus on yield has positioned the carrier relatively well, financially at least, in its European competitive stakes, although reducing its global reach.

IAG CFO Enrique Dupuy, after announcing the bmi acquisition, did not mince words in making clear that the attraction was not with the airline, remarking "Our preferred asset in this transaction is the slots".

IAG has no interest in either and did not include them in the deal, but has secured itself undisclosed discounts from Lufthansa if it is obliged take them. Lufthansa previously announced a tentative deal for bmibaby, but this has not been confirmed. There were early discussions about interest in bmi Regional but here too nothing is confirmed. Of the two, bmi Regional holds a stronger outlook. The Scotland-based subsidiary of bmi primarily operates domestic flights within the UK and its financial status according to Mr Dupuy is "very near break even".

There had been local reports suggesting a Scotland-based consortium was interested in acquiring bmi Regional. While Mr Dupuy at the time of bmi's initial sale did not comment on specific bidders, he was confident bmi Regional could be spun-off. If Lufthansa cannot sell bmibaby by May and IAG has to take bmibaby, the included compensation would keep IAG's financial projections for bmi mainline on tract.

IAG would also receive compensation if it cannot acquire any of bmi's leased slots. But IAG's majority is well below the monopolies enjoyed by its rivals. In addition to taking a large loss on the sale, Lufthansa will itself pay the hefty fees associated with bmi's exit from Star Alliance. In a statement, Lufthansa says that after reductions it expects the bmi transaction to be "significantly negative".

Earlier this month Star member Asiana posted a note, since taken down, that bmi would leave the alliance on Apr IAG has not confirmed a departure date while bmi has issued a statement saying: While IAG publicly remarked at the time of sale it would consider using the bmi brand, it has since decided to integrate bmi fully into BA, which will see the end of the bmi brand in the near future. Further details are expected to be disclosed once the transaction closes later this month.

2. Fare combinability

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