UK airline hails strategy shake-up as profits soar

Airline group BMI today hailed a major overhaul of its strategy for helping to revive profits at a time of soaring fuel costs.

The second biggest operator at London’s Heathrow Airport posted pre-tax profits of £10m (€14.3m) for 2005, compared with £2.6m (€3.7m) a year ago.

While passenger numbers were static at 10.5 million, BMI said this reflected a focus on flying higher-yield business passengers and the more efficient use of its fleet of aircraft.

It faced a fuel bill of £37.5m (€53.7m) in 2005, but this was in part recovered by passenger surcharges as the group – home to low-cost airline bmibaby as well as full-service and regional operations – turned operating losses of £3.2m (€4.5m) in 2004 into profits of £5.5m (€7.8m) last year.

BMI chairman Michael Bishop, who has a controlling stake of more than 50% in the group, said the figures for 2005 demonstrated good progress.

Under chief executive Nigel Turner, the company has set itself up to focus its main BMI operation on business traffic while at the same time managing availability of the lower-yield traffic.

It also completed a fleet rationalisation which enabled its three divisions to operate a single fleet, with the Airbus A320 and 330 family used for Heathrow and long-haul operations, Boeing 737s for bmibaby and Embraers for BMI Regional.

In addition, the group rationalised engineering activities, outsourced heavy maintenance and developed more e-booking services, as part of a wider drive to improve efficiency levels.

Bishop added: “The business environment remains tough but we are confident that this strategy is proving successful for BMI.”

BMI’s full service and regional services operate 1,700 flights a week to locations including Copenhagen and Las Vegas, while bmibaby – established in January 2002 – runs more than 750 flights a week.

Average staff numbers at the group were unchanged during the year at 4,555.