BRITISH Midland is on the verge of a new era that will transform it from being purely a European player to a global carrier.
By January next year, British Midland is hoping to have launched its first scheduled transatlantic flights, adopted a new name and become a fully fledged member of the global Star Alliance.
But first there are a lot of tough decisions to be made by management, not to mention a great deal of hard bargaining and arm-twisting if the airline is going to get what it wants.
Top of British Midland’s wish-list is transatlantic flights from Heathrow.
Under the UK-US air service agreement, new airlines are not allowed to launch Heathrow-US routes. But British Midland is trying to get the Department of Transport, the Civil Aviation Authority and the two existing UK transatlantic carriers, British Airways and Virgin Atlantic, to agree to let it start a limited number of flights.
Under the terms of the deal, BA and Virgin would also have to agree to increased services from US carriers to make it acceptable to the Americans.
British Midland chief executive officer Austin Reid said: “There is a feeling that if we could find a proposal acceptable to all UK parties, the US would accept it.”
Reid is aware that time is running out for the airline as the US is about to swing into presidential election mode, and if there isn’t any decision soon, it could be years before the matter is reconsidered.
“If we don’t get something now for implementation this year or early next year, we will be stuck with the present scenario for a number of years,” said Reid.
British Midland already has permission from the UK Civil Aviation Authority to fly to New York, Washington DC, Boston and Miami and the airline is believed to be pushing for two to five flights a day. Depending on the number of frequencies it is offered, it will also consider launching flights from Manchester.
British Midland plans to offer a two-class service, with lower business-class fares than the existing carriers which it claims have been charging passengers over the odds.
Finding slots at Heathrow would not be a problem for British Midland.
“We would only need two to five slots a day, which is less than 5% of our total number of slots,” said Reid. “We may reduce frequency on one of the routes on which we have seven or eight flights a day but we will not be reducing capacity because we are introducing larger aircraft.”
Whether or not the airline starts flying to the US, it is planning to go ahead with a total rebrand towards the end of the year that may include ditching the name British Midland for something less parochial.
“We have not evaluated the full implications of a name change which is a separate issue from the rebrand but a decision on this will be made during the first quarter,” said Reid.
He admitted the name was not well known in the US but as British Midland is proposing to launch transatlantic flights with its Star Alliance partner United Airlines, Reid said this was unlikely to pose a problem.
British Midland is expecting to become a fully fledged member of the global Star Alliance, which is subject to regulatory approval, by mid-summer.
Reid said joining the global grouping will enable the airline to offer more destinations and more frequencies by offering codeshare flights with member airlines.
“This will give passengers and the travel agent more choice,” said Reid.
British Midland already has 19 codeshare partners but the members of the Star Alliance plan to integrate their networks to allow easier transfers between their flights.
Reid admitted it was likely to take some time for this to become a reality because of the amount of work involved but said there would be more immediate benefits for the passenger.
“By the middle of this year, we will have certain key features in place, such as access to members’ lounges and integrated frequent-flyer programmes,” he said.
“We have done the deal. Now we have got to make it work.”
british midland
Established: 1938 (as Air Schools Limited)
Based: Castle Donington, Derby
Main hub: Heathrow.
Number of employees: 6,000 throughout.
Owners: 60% held by Sir Michael Bishop, directors John Wolfe and Stuart Balmforth; 20% SAS; 20% Lufthansa.
Key personnel: Sir Michael Bishop, chairman; Austin Reid, chief executive officer; James Hogan, chief operating officer; John Morgan, director of sales and marketing.
Network: operates from 29 cities in Europe, of which 20 – including six in the UK – are served from Heathrow. Also operates from Aberdeen, Belfast, Birmingham, East Midlands, Edinburgh, Glasgow, Leeds Bradford and Manchester.
Codeshare partners: Air Canada, Air Lanka, Alitalia, Austrian Airlines, Continental Airlines, Gulf Air, Malaysia Airlines, South African Airways, TAP Air Portugal, Virgin Atlantic, Air France, Air New Zealand, American Airlines*, Cathay Pacific*, Icelandair, Lufthansa, Royal Brunei, SAS and United Airlines.
Fleet: 52 aircraft ranging in size from the 34-seat Saab 340 to the 195-seat Airbus A321. Includes 19 Boeing 737s.
*Ends March 2000.