bmi halves losses and rules out airline merger with Virgin

Britain's second biggest full-service airline, bmi, is expected to report tomorrow a halving in losses for last year to about £9m and to rule out a merger with Sir Richard Branson's Virgin Atlantic.

The group, which also owns a regional carrier and the latest entrant into the no-frills market, bmi baby, will also outline the progress made so far in its £100m cost-cutting programme.

The airline lost £19.8m in 2002 after the attacks of 11 September 2001 plunged the industry into a steep recession. Increased price competition from budget carriers such as Ryanair and easyJet also hurt bmi, which is predominantly a domestic and European carrier save for a handful of routes from Manchester to America.

Sir Richard Branson's long-haul airline Virgin Atlantic, which recorded a slight increase in profits for the year just ended compared with the £15.7m it made in 2002, has been courting bmi for some time with a view to a merger.

However, Sir Michael Bishop, who controls 50 per cent of bmi plus one share, has so far held out against a deal. Lufthansa holds 30 per cent less one share and the Scandinavian airline SAS the remainder.

Whereas Virgin is in expansion mode with plans to take on 1,400 staff, operate three new routes and place a $3bn order for 30 new aircraft, bmi is in the process of slimming its workforce. The Blue Sky initiative, launched in the middle of last year, involves some 1,500 job cuts at bmi - equivalent to nearly one-third of the workforce. As part of the plan to cut operating costs by some 18-20 per cent, bmi is also aiming to increase the proportion of tickets sold on the internet to 50 per cent and expand e-ticketing.

In a bid to fight back against the likes of Ryanair, bmi baby has grown in size from just two aircraft operating eight routes at its launch two years ago to a fleet now of 14 aircraft serving 40 destinations. Last year, bmi baby carried 1.7 million passengers.

The group is also expanding its long-haul network and starts services from Manchester to Toronto next month and to the Caribbean islands of Barbados, Antigua and St Lucia in November.

Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

No grace of God for Katy Perry as sisters act to stop her buying convent

Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin