BMI has warned staff it faces its biggest-ever losses and will remain loss-making in 2009 despite “aggressive action” to cut costs.
Chief executive Nigel Turner told 5,000 employees in a statement yesterday: “Our financial results this year will produce the largest loss we have ever recorded by a considerable margin.”
He blamed, “a combination of falling consumer demand and increases to costs in areas outside our control”.
BMI is poised to be taken over by Lufthansa, currently a 30% stakeholder, in a deal to be concluded in January. BMI has already pulled its long-haul flying from Manchester and announced cuts in no-frills carrier bmibaby’s operations at Birmingham International.
Turner said the takeover by Lufthansa was unlikely to ease the pressure. “Lufthansa will expect us to reshape the business to remove unprofitable flying,” he told staff.
The airline announced a wage freeze in 2010, but said it would honour an agreement to pay an inflation-plus- 0.5% rise next year.
Bmi’s woes are likely to mean more bad news for UK regional airports, which have suffered a spate of service losses in recent months. Lufthansa has said it will look to dispose of bmibaby.