British Midland International
|Frequent-flyer program||Diamond Club|
|Parent company||International Airlines Group|
|Headquarters||Donington Hall, Castle Donington, United Kingdom|
British Midland Airways Limited (trading as bmi or British Midland International) was an airline with its head office in Donington Hall in Castle Donington, close to East Midlands Airport, in the United Kingdom. It was acquired by International Airlines Group (IAG) in April 2012 and was integrated into British Airways (BA) by 27 October 2012. The airline flew to destinations in Europe, the Middle East, Africa and Central Asia from its operational base at London Heathrow Airport, where at its peak it held 11 per cent of all takeoff and landing slots and operated over 2,000 flights a week. BMI was a member of Star Alliance until it withdrew on 20 April 2012.
The airline was a wholly owned subsidiary of IAG, the owners of BA, who announced an agreement in December 2011 to buy the airline from Lufthansa. The deal was completed on 20 April 2012 and also included subsidiaries Bmibaby and BMI Regional, although IAG did not wish to retain either. BMI Regional was sold to Sector Aviation Holdings in May 2012, and Bmibaby closed down in September 2012.
The airline dates back to before the Second World War when Captain Roy Harben established Air Schools Limited in 1938 as a school for training pilots of the Royal Air Force Volunteer Reserve. Captain Harben had been approached by the Derby Corporation to run a new aerodrome under construction near Burnaston, which was planned to eventually become an airport. Sir Kingsley Wood, the Secretary of State for Air, officially opened the aerodrome as Derby Municipal Airport on 17 June 1939. Military flying training continued at the airport throughout the war.
Air Schools Limited formed a parent company, Derby Aviation Limited, in 1946, and Harben died the following year from a heart attack. His wife remained the controlling shareholder of the business and asked E. W. Phillips, who had been involved in running the flying school with Captain Harben, to become the new managing director. The new parent company also incorporated Wolverhampton Aviation, based near Pendeford, which offered ad hoc charter and freight flights with De Havilland Dragon Rapides, as well as aircraft maintenance and brokerage.
Derby Aviation received a licence in 1953 to operate scheduled flights from Burnaston and Wolverhampton to Jersey, and ceased flying training. Flights in each direction were required to land at Elmdon Airport in Birmingham to allow passengers to clear customs. The first flight was made on 18 July 1953, using a De Havilland Dragon Rapide. The following year, Wolverhampton Aviation was merged into Derby Aviation, and the company purchased its first Douglas DC-3, a converted former military transport, in 1955.
International services commenced in 1956 to Ostend and holiday flights to mainland Europe began. The company was also contracted by Rolls-Royce to transport aero engines to customers throughout the world. In 1959 Derby Aviation created Derby Airways as its airline business, and introduced a new livery with the name for its aircraft. Domestic scheduled flights within the United Kingdom were launched in the same year.
British Midland Airways 
On 1 October 1964, after buying the Manchester Airport-based schedule and charter airline Mercury Airlines, the company changed its name to British Midland Airways (BMA) and moved operations from Burnaston to the recently opened East Midlands Airport. The corporate colours of blue and white were adopted at that time, along with the first turboprop aircraft, the Handley Page Dart Herald.
Minster Assets, a London-based investment and banking group, acquired the airline in 1968, and in 1969 promoted former Mercury ground handling manager Michael Bishop to become the company's General Manager. Bishop from this point forward drove the company, with Domestic and European expansion continuing apace. In 1970 BMA entered the jet age with the introduction of the BAC One-Eleven, followed by the Boeing 707 in 1971. In 1972 Bishop became Managing Director. He withdrew the BAC One-Elevens from service and leased the 707s to other airlines, as BMA concentrated on turboprops such as the Vickers Viscount, which was operated from 1967 until the mid-1980s. Though the 707 fleet was increased, they were leased to other operators, with none operating for BMA on scheduled services or charter services until 1981. The fleet was gradually converted to jet operation for most of the airline's domestic and European service when the Douglas DC-9 was introduced in 1976.
In January 1975, an agreement was reached for BMA to provide two Vickers Viscount's in Cyprus Airways livery to link Athens with Cyprus. A former Second World War airfield at Larnaca was selected to serve the south of the island, following the Turkish invasion of Cyprus in 1974. The first flights departed Larnaca on 10 February 1975. On 4 April 1975, a British Midland Boeing 707 was chartered by the Daily Mail newspaper to assist the Project Vietnam Orphans and The Ockenden Venture charities in evacuating 150 orphaned children from Saigon during the Vietnam War.
In 1978 Minster Assets sought to sell the company. With the help of a Californian entrepreneur, Robert F. Beauchamp, Bishop raised £2.5million to lead the management buy-out, and was appointed Chairman as a result, afterwards stating "I had to borrow the money from an American citizen. Most venture capitalists want a return of 40 per cent to make up for all their other failures and they want an exit strategy." That year, British Midland and British Airways agreed to route swapping, resulting in British Midland Airways relinquishing its continental routes from Birmingham to Brussels and Frankfurt, and BA handing over its routes from Liverpool to London Heathrow Airport, Belfast, Dublin, Jersey, the Isle of Man and Glasgow. Annual passenger numbers topped 1 million for the first time in 1979.
In 1981 an application to fly between Heathrow, Glasgow and Edinburgh was denied by the Civil Aviation Authority (CAA). The ruling was overturned after an appeal was lodged with the Secretary of State for Trade and Industry. With the introduction of these services, BMA and BA were now in direct competition. BMA, together with British & Commonwealth Shipping, formed Manx Airlines in 1982, and the following year BMA purchased a 75 per cent stake in Glasgow-based airline Loganair from The Royal Bank of Scotland.
In October 1984, the Boeing 707 fleet was withdrawn, having been used extensively on lease operations for other airlines across the world. Aircraft were painted in a new livery in 1985, featuring very dark blue, with a deep grey lower half of the fuselage and a red relief. At this time, BMA was branded simply British Midland, and a new logo featuring a stylised red BM crowned with a diamond shape appeared on the aircraft tailfins. The Diamond Club frequent flyer programme launched on 1 October 1987, coinciding with the introduction of airport lounges at UK hubs. All aircraft in the fleet were named after diamonds, beginning with a DC-9 named The Tiffany Diamond, unveiled by Rosamond Monckton, the managing director of Tiffanys in London.
In March 1987 Airlines of Britain Holdings (ABH) was formed to act as a holding company for British Midland Airways and British Midland Aviation Services. The final flight of a Vickers Viscount for British Midland was made on 20 February 1988. In 1992 British Midland became the first airline to offer a vegetarian choice of in-flight meals on UK domestic services, one of the first airlines in Europe to do so. ABH became British Midland Plc in 1997, when it was de-merged as part of wide restructuring. Towards the end of the 1990s, British Midland switched to Airbus and Embraer for its fleet renewal programme. In July 1999 Bishop formally opened the British Midland Training Centre in Stockley Close. That year, Scandinavian Airlines System (SAS), a shareholder in British Midland since 1987, sold some of its stake to Lufthansa on the condition that British Midland joined Star Alliance; the airline joined in 2000.
British Midland launched a new corporate identity in 2001, rebranding the airline as BMI British Midland, officially British Midland International. Aircraft received a new livery of royal blue, white and a fading Union flag on the tail, along with the new BMI logotype. BMI introduced the Airbus A330 into the fleet, and announced new routes from Manchester to the United States. Further routes were planned, although the 1977 Bermuda II agreement meant the airline could not sell tickets on United Airlines flights, as had been planned.
The airline carried 7.5 million passengers during 2002. By 2005 the total had risen to 10.1 million, the third highest of any UK airline. In early 2006, the Association of European Airlines (AEA) reported a drop in passengers carried and load factors for BMI mainline and regional services (excluding Bmibaby) whilst reporting increased loads for other AEA members over the same period. Despite this drop in passenger figures, the BMI Group reported a pre-tax profit of £10 million for the year ending 31 December 2005.
BMI operated a service to Mumbai from London Heathrow between May 2005 until October 2006, after the UK and India concluded amendments to their bilateral air service agreement. Services to Riyadh followed, commencing on 1 September 2005, 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 2006, which used a dedicated A320 aircraft (G-MIDO) with special seating for the service, including leather seats and a 40" seat pitch. In 2007 the airline launched non-stop services from its Heathrow hub to Cairo and Amman, raising the airline's profile in the Middle East significantly. BMI announced on 5 November 2008 that it would end all longhaul operations from Manchester Airport. The two Airbus A330 aircraft based there were moved to Heathrow.
In February 2007 BMI bought British Mediterranean Airways (BMED), a British Airways franchise partner, and as a result gained access to new markets in Africa, the Middle East and Central Asia that were served by that carrier. As a condition of the sale, BMI sold BMED's Heathrow slots to British Airways for £30 million. The sale meant BMI had to reduce some existing flights to fit the former BMED flights into the schedule in 2009. BMED was fully integrated into BMI on 28 October 2007.
In November 2009, 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 include 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 2010. Seasonal routes from London Heathrow to Palma and Venice were discontinued as well. It was said that the restructuring could result in the loss of around 600 jobs – around 13 per cent of the airline's workforce.
On 12 January 2010 BMI announced that from 28 March they would reduce the number of flights between Dublin and London Heathrow from 6 to 4 per day due to the economic climate, which led to low consumer demand. This resulted in the closure of the Dublin base, which consisted of one plane and 33 cabin crew.
In April 2010 the carrier announced it would begin using the British Midland International name in full, whilst retaining the BMI logo and continuing to be known by those initials in the domestic market.
Corporate affairs 
Head office 
The airline had its head office at Donington Hall in Castle Donington in North West Leicestershire, near Derby. The airline's head office was previously at 78 Buckingham Gate in the City of Westminster, London until 1982. In 2011, BMI employed 527 staff at Donington Hall. In 2012 International Airlines Group announced that it may lay off up to 1,200 BMI employees, with proposed layoffs mainly from the head office.
BMI also operated a flight training centre in the Stockley Close Industrial Estate in West Drayton, London Borough of Hillingdon, near London Heathrow Airport. The centre opened in 1999 and BMI had a 50-year lease on the property running from 25 March 1999 to 24 March 2049.
In 1999, SAS sold part of its stake in British Midland to Lufthansa, which was seeking a stronger position at London Heathrow Airport, with the condition that British Midland join Star Alliance. At the time, British Midland chairman Sir Michael Bishop owned a 50 per cent share of the company. Between 1999 and 2004, Lufthansa sought to sell some or all of its share in the airline. Virgin Atlantic hoped to buy the shares in order to then merge both airlines, as BMI was already Virgin's preferred feeder airline into Heathrow. The merger would have brought together two airlines with combined ticket sales of more than £2 billion, forming a powerful force in the aviation industry. BMI was believed to have initiated the talks after it began losing money following the 11 September 2001 attacks. A merger would have strengthened Virgin Atlantic's base at Heathrow, where BMI has hundreds of valuable take-off and landing slots, to increase the competition with British Airways.
The two airlines combined would have 17 per cent of Heathrow slots against British Airways' 43 per cent. British Airways was worried about the rivalry it would face if such a merger went ahead, and considered the takeover of either BMI or Virgin Atlantic to stop the merger. British Airways concluded it would be easier to take over the smaller BMI. However, in 2004 talks of any merger of the three airlines stopped. In late 2006 the airline again dismissed renewed speculation that Virgin Atlantic was preparing to make a bid to acquire full control of BMI, despite Sir Richard Branson repeating in a radio interview that such a merger would be a logical business move.
In June 2007 SAS announced that it would sell its 20 per cent stake to improve its own group profits. The airline commented that it was in early discussions with Lufthansa as a potential buyer. In October 2008 Lufthansa announced it would be taking over BMI by purchasing the 50 per cent shareholding of Sir Michael Bishop to consolidate with the 30 per cent share it already owned.
The European Antitrust body approved the takeover on 14 May 2009, allowing Lufthansa to become the majority stakeholder. Due to landing rights issues, the stake would be tentatively held by a Lufthansa-controlled but British-based company, LHBD Holding. Once new bilateral agreements were in place, Lufthansa would take direct control. In June 2009 it was announced that Lufthansa would buy the remaining stake in the airline from Bishop for less than originally agreed upon.
Sale to International Airlines Group 
Lufthansa announced in September 2011 that it planned to sell BMI following continued losses. Virgin Atlantic were mooted to be considering an offer; but in early November British Airways' parent company, International Airlines Group, announced an agreement in principle to purchase the airline. Virgin Atlantic confirmed on 12 December 2011 that it had also made an offer for BMI and signed an agreement in late November to allow them to conduct due diligence on the airline. The bid amount of around £50m was half that offered by IAG; Virgin hoped that a quick sale due to fewer potential regulatory issues would convince Lufthansa to sell to Virgin.
On 22 December 2011, IAG confirmed it had entered a contract to buy BMI from Lufthansa for £172.5m. This would increase IAG's share of take-off and landing slots at Heathrow from 45 per cent to 53 per cent. Branson pledged to fight the deal, urging European competition authorities to intervene. The deal included the option for Lufthansa to sell BMI Regional and Bmibaby separately, as they are not required by IAG; the deal price would be lowered should Bmibaby not be sold in time. Under the agreed contract, Lufthansa would continue to be responsible for the BMI pension scheme after the sale was completed, although following rejection by the pension regulator, it is now to enter the Pension Protection Fund.
On 30 March 2012 the sale of BMI was approved, with conditions to give twelve daily slots and lease two daily slots. Ownership transferred to IAG at 23:59 on 19 April. The airline left Star Alliance, but membership benefits for both Star Alliance and BMI's Diamond Club continued until 31 May 2012.
The Diamond Club programme will continue for members with a BMI credit card, who will be able to continue earning points from their flights. All other members are required to transfer to British Airways' Executive Club.
In 2002, BMI set up a low-cost subsidiary, Bmibaby, using Boeing 737s which were displaced after BMI's fleet renewal programme favoured an all-Airbus fleet. Bmibaby flew routes between major and secondary airports around Europe from its bases at East Midlands Airport and Birmingham Airport until it was closed down by IAG in September 2012.
The airline also operated a regional subsidiary named BMI Regional, headquartered in Aberdeen. An agreement to sell the airline to the Scottish-based consortium Sector Aviation Holdings was reached in May 2012 and was completed on 1 June 2012. BMI Regional continued to operate regional services for BMI until 27 October 2012 when it began operations as an independent airline.
Financial performance 
The key trends for BMI over recent years are shown below (figures as at year ending 31 December, and include Bmibaby): Financial data is reported in pounds sterling, and then in euros, because BMI was fully consolidated into the Lufthansa group of airlines on 1 July 2009.
|Pre-tax profits (£m)||10.0||29.7||15.5||−155.6||↓|
|Pre-tax profits (€m)||−44||−117|
|Number of employees||4,346||3,613|
|Number of passengers (m)||10.5||10.5||10.6||10.0||n/a||6.2|
|Passenger load factor (%)||not available|
|Number of aircraft (at year end)||67||59|
Following the sale of BMI to IAG, the airline's fleet began to be transferred to BA. All aircraft were transferred and repainted in the BA livery, excluding two Airbus A330s which were returned to the lessors. At its peak prior to the commencement of licensing transfers, the fleet consisted of the following aircraft registered with the Civil Aviation Authority, with an average fleet age of 7.7 years:
In-flight service 
On flights from London Heathrow within the UK and to Ireland, economy class passengers had a selection of food items available for purchase; flexible economy class passengers were offered complimentary snacks and drinks.
On European flights and services to Tripoli, Tunisia and Morocco, a two-class in-flight service was in place, with a hot three course meal for the business cabin and complimentary food and drinks served in the economy cabin.
On mid-haul and the Freetown route, a two-class in-flight service was also in place. The business cabin was served a three course meal and was provided in-flight entertainment. A hot meal and complimentary drinks were served in the economy cabin.
On A330 services to Saudi Arabia and Israel (until 2010), business, premium economy (only on board the flights to Israel) and economy cabins were available, each provided with complimentary drinks and food.
Frequent flyer programme 
Incidents and accidents 
- The Stockport Air Disaster: a Canadair C-4 aircraft owned by British Midland Airways, registration G-ALHG, operating a holiday charter flight crashed near the centre of Stockport, Greater Manchester, on 4 June 1967. 72 of the 84 aboard were killed in the accident; 12 were seriously injured.
- On 20 February 1969 a Vickers Viscount, G-AODG, was damaged beyond economic repair when it landed short of the runway at East Midlands Airport. There were no casualties.
- On 20 March 1969 a Vickers Viscount, G-AVJA, crashed on take-off at Ringway Airport, Manchester. Three of the four crew members on board were killed.
- On 22 January 1970 a Vickers Viscount, G-AWXI, was damaged beyond economic repair at London Heathrow Airport when an engine caught fire on take-off. A successful emergency landing was made at Heathrow.
- The Kegworth air disaster: on 8 January 1989 British Midland Flight 092, a Boeing 737-400 registered G-OBME, crashed onto the embankment of the M1 motorway just short of the runway of East Midlands Airport, Leicestershire. 47 people died out of 118 passengers.
- On 24 August 2010 an Airbus A321-231 registration number G-MEDJ en route from Khartoum to Beirut as flight BD996 suffered a serious electrical malfunction which caused the intermittent failure of the captain and co-pilot's electronic displays together with the uncommanded application of left rudder trim. The latter caused the aircraft to stray 20 nautical miles off course. The aircraft was cruising at 36,000 ft at the time, with both autopilot and autothrust engaged. The captain ultimately disengaged both and flew the aircraft manually, landing in Beirut without further mishap. Airbus indicated that an electrical power interruption had occurred which had caused a reset of the Flight Augmentation Computer (FAC). Such an event may cause a small incremental offset of the rudder trim, according to the aircraft manufacturer. The Air Accidents Investigations Board (AAIB) subsequently issued Safety Recommendation 2010-092, recommending that Airbus alert all operators of A320 series aircraft of the possibility that an electrical malfunction may not be clearly annunciated on the Electronic Centralised Aircraft Monitoring system (ECAM) and that such an event may lead to an uncommanded input of rudder trim.
See also 
- Air transport in the United Kingdom
- List of airports in the United Kingdom
- Transport in the United Kingdom
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