British Midland1) 2)


 

 

Germanwings tail fin (graphics)

 

 

2011

2010

Change
in %

1)

More information on British Midland can be found at www.flybmi.com.

2)

Discontinued operations.

Revenue

€m

865

896

–3.5

Operating result

€m

–199

–145

–37.2

EBITDA

€m

–135

–117

–15.4

Passengers carried

thousands

5,733

6,194

–7.4

Employees as of 31.12.

number

3,690

3,613

2.1

Since November 2009 Lufthansa has been the sole shareholder of British Midland Airlines Ltd. (bmi) via the British holding company LHBD Holding Ltd. Since then, extensive restructuring has been carried out to bring bmi back to profitability in the medium term. In December 2011 the sale to International Airlines Group (IAG) took place.

Present with three airlines in its UK home market

The bmi group consists of three airlines – British Midland International, bmi Regional and bmibaby, each of which focusses on different markets and customer groups. The core market for all three airlines is the United Kingdom.

British Midland International sees itself as a classical carrier and its route network from London Heathrow serves destinations in the UK home market and in Europe, the CIS states, the Middle East and Africa. The slots at London Heathrow are thereby of great strategic value. Over the course of the reporting year the strategy of abandoning routes within the UK in favour of new routes to neighbouring countries and to the Middle East was continued.

With its Embraer fleet, bmi Regional exclusively operates short-haul flights within the UK and Europe.

The bmibaby fleet consists of 14 aircraft from the Boeing 737 family. The East Midlands and Birmingham airports are the main operating base for the low-cost airline where it has a strong presence.

Market developments overshadow restructuring success

The restructuring of the bmi group continued in the financial year.

The location in Glasgow was closed for British Midland International and capacities to Berlin-Tegel were reduced. New routes were established to Casablanca, Marrakesh, Agadir, Bergen, Stavanger, Nice and Amritsar. bmibaby pulled out of Manchester and Cardiff.

All in all, the cost-cutting measures were effective and contributed to reducing the cost base. They were nonetheless not sufficient to offset higher fuel expenses, fees and charges in full.

On the income side bmi was also not able to meet its targets. Economic developments in the UK were again subject to a high degree of uncertainty. Coupled with the strong presence of low-cost carriers in the UK home market, this meant that average yields remained low. Routes to the Middle East and North Africa were severely disrupted by the unrest there and in some cases the flight programme was cut sharply. The planned service to Tripoli did not come to fruition either. In aggregate, these factors led to an operating result of EUR –199m, which was below the previous year’s figure of EUR –145m.

Over the course of the year various alternative approaches to further restructuring were therefore investigated, as were disposals of parts of the group. In the meantime letters of intent have been signed for the sale of bmibaby and bmi Regional.

The company’s financial profile was strengthened in July 2011 via the conversion of a short-term loan of GBP 151m from Lufthansa into equity. An additional equity contribution of GBP 150m was also paid in.

Future outside the Lufthansa Group

The outlook is difficult, also in the medium term, partly due to structural factors in the UK market and at London Heathrow Airport. For this reason it has not been possible to realise the full strategic value of bmi’s slots within the Lufthansa Group. The strategic significance of the company for the Lufthansa Group is therefore limited. After a thorough review of the strategic alternatives, Lufthansa therefore decided to sell the bmi group. A sales agreement with IAG was signed on 22 December 2011. The aim is to complete the transaction by the end of the first quarter. It is subject in particular to review by the competition authorities. The transaction gives bmi the prospect of a sustainable future and strengthens the future profitability of the Lufthansa Group at the same time.

In the consolidated financial statements for the Lufthansa Group bmi’s assets and liabilities are therefore presented separately as a disposal group and valued accordingly. In the reporting period the result from discontinued operations came to EUR –285m, which is made up of the current after-tax result of EUR –155m (previous year: EUR –152m) and the valuation/disposal proceeds of EUR –130m. More detailed information is available in the Notes to the consolidated financial statements, “Note 15”.

Downloads
Printing
Chart Generator
Chartgenerator

Compare key figures over several years. more