UK carrier bmi confirmed at the end of last week that it was in advanced discussions to sell bmi Regional to a UK-based investor group previously “associated with the regional business”. This marks the first stage in Lufthansa’s planned sale of its interest in the UK operator and could result in similar deals being arranged for the mainline business and low-cost division, bmibaby.
"The intended sale of bmi Regional is part of the strategic review of bmi," said Wolfgang Prock-Schauer, Chief Executive Officer, bmi British Midland International. "It is our goal to find sustainable solutions for all parts of the BMI business and we, as well as the shareholder, continue to assess options."
The sale, in the form of shares of bmi Regional, includes all assets used in the bmi Regional business including the aircraft fleet, the existing regional route network and the continued employment of the existing staff. Although the parties involved in this deal have not been officially named they are widely thought to include Graeme Ross and Ian Woodley, who founded former regional carrier Business Air, which was bought by bmi in 1996 and formed the basis of the bmi Regional operation.
According to bmi, it is envisaged that transaction documents will be “signed shortly” and subject to achieving all regulatory approvals, and after having conducted staff consultations, the target completion date will be before the end of this calendar year. It is expected that bmi Regional will continue to fly during an interim period under its existing brand name and under the bmi ‘BD’ flight code, but it is believed that a new brand will be launched during 2012 as its transitions to a standalone Air Operator’s Certificate (AOC).
bmi confirms that the venture will continue to operate its published Northern Winter 2011/2012 schedules and that no major network changes are envisaged for summer 2012, although new routes are expected to be added in the future. “The new owner plans to continue the airline as an independent entity based in Aberdeen and to further develop the regional network in both the UK and Europe,” says bmi.
bmi Regional operates a fleet of four Embraer ERJ135s and 15 ERJ 145s on a mix of domestic and European routes, some for bmi mainline and others in partnership with Brussels Airlines and Lufthansa. This winter the 37-seat ERJ135s are being used on flights from Aberdeen to Esbjerg, Groningen, Manchester and Norwich; from Glasgow to Copenhagen and Leeds Bradford and in partnership with Brussels Airlines to the Belgian capital from East Midlands and Leeds Bradford.
The larger 49-seat ERJ145s are used on routes from Aberdeen to London and Manchester; from Edinburgh to Brussels, Copenhagen, Leeds Bradford, Manchester and Zurich; from London Heathrow to Bergen, Dublin, Hanover, Manchester and Stavanger; between Manchester and Lyon and a new route from East Midlands to Frankfurt.
As Business Air proved since its formation in 1987, Aberdeen can easily support a strong regional carrier and there is sufficient demand to support routes to a number of UK and European markets. Although the first decision for the proposed new owners of bmi Regional could well be how they intend to develop the carrier’s fleet, as the Brazilian-built ERJ models are probably not the best suited or most efficient for its development plans.
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