Airline restructuring in bid to cut costs

Airlines need to slash their costs and air fares if they are to survive, the chief executive of bmi british midland was saying today.

Austin Reid was speaking at a conference at the Institute of Economic Affairs as the airline undergoes a major restructuring programme to enable it to compete in today’s market.

A bmi spokeswoman said the group began the restructuring in the summer in a bid to turn the airline into a low-cost business.

She said: ‘‘We are restructuring the airline into a low-cost business. We know our costs are too high and we are looking at our costs to see how they can be reduced.

‘‘We have been restructuring the business to ensure that our operating costs are as low as reasonably possible to ensure we can compete in today’s aviation market place.’’

But she stressed that while the group was cutting costs it had no plans to relaunch itself as a no-frills airline such as Go or easyJet.

She added that the restructuring would continue into next year but the group, which shed 109 pilot jobs last month, did not anticipate there being any job losses as a result of it.

The focus on costs is likely to see bmi increasing the number of flights on its profitable routes, such as those to Edinburgh, Glasgow, Dublin and Amsterdam, though it said it had not included plans to do this in its winter timetable.

bmi, which has 14% of all take-off and landing slots at Heathrow airport, said it may also consider closer links with other members of the Star Alliance group, in which 15 airlines share lounges and frequent flyer programmes.

It currently has an agreement with other members of the group under which it transports passengers from long-haul flights to regional airports within the UK.