Go's move to East Midlands sparks dogfight with rival airline BMI

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A row erupted yesterday between BMI British Midland and Go after the low-cost carrier unveiled plans to begin operating services from East Midlands airport next year.

BMI British Midland, which is one of the biggest carriers at East Midlands, flying 750,000 passengers a year to 13 UK and European destinations, immediately challenged the airport authorities to guarantee that Go would not receive preferential terms.

Go said it would start services from East Midlands next May and expected to carry more than 500,000 passengers in the first year of operation. It did not specify which services it would operate but said they would be selected from its most popular routes.

Austin Reid, BMI British Midland's chief executive, said it would not tolerate Go's services being subsidised by charges imposed on other airlines at East Midlands.

"It is imperative that if passengers are to continue to benefit from lower fares, airlines using the airport must be treated on an equal basis," he added. "Not to do so threatens the capability of all airlines to compete and we need guarantees and assurances on this critical issue."

BMI British Midland has already warned that it expects to make a loss next year because of the downturn in air travel and increased competition from cut-price airlines such as Go, Ryanair and easyJet. In response it has announced plans to introduce low-cost operating techniques, including a switch to a common fleet of Airbus aircraft. It is also asking its pilots to fly more hours a year so it can get greater use out of the fleet.

Ironically, Go's decision to expand at East Midlands is the result partly of being forced off services between Dublin and Scotland by Ryanair. Go's chief executive, Barbara Cassani, said that Ryanair's entry on to the routes meant that it would take longer for Go to make a profit out of its own services. As a result, it was switching capacity to routes where there is no low-cost alternative.

Go operates principally from Stansted but early this year launched services from a second base at Bristol airport. East Midlands will be its third airport.