Star Alliance member BMI announced new scheduled services to the Libyan capital of Tripoli this week, a move which further strengthens the carriers focus on new medium-haul markets. The Hub analyses the BMI strategy.
This December will see BMI begin a daily service from London Heathrow to Tripoli, the capital of Libya. Earlier this month the carrier announced that it would double its existing daily service into Beirut, whilst its regional operator BMI Regional withdrew service from Birmingham to Aberdeen.
BMI GROUP STRATEGY
Since the BMI integration into the Lufthansa group, the BMI group, consisting of BMI, BMI Regional and bmibaby have developed a clear strategy for each carrier. bmibaby has sought closer relations with fellow low-cost Germanwings, serving not just sunshine markets but also new points in Germany.
BMI Regional is focused on operating niche routes from regional bases, whilst BMI continues to expand its London Heathrow presence as a Star Alliance hub and has continued its expansion away from Western Europe, which had commenced before its integration into Lufthansa.
Whilst BMI will continue to use bmibaby to serve the sunshine markets from regional UK airports, Manchester, Birmingham, Cardiff and East Midlands, BMI regional's equipment which consists of E135 and E145 will be mainly deployed from its regional airports such as Aberdeen, Glasgow and Edinburgh on domestic and European markets. BMI Regional has had a difficult time placing its Embraer aircraft into markets that can make a profit. Domestic routes such as Birmingham-Aberdeen are subject to a number of issues for small jets.
Firstly, the ferocious downward yield pressure by low-cost carriers and more significantly, the turboprop competition that Flybe provides in regional airport markets. BMI Regional will be more likely to consider placing the aircraft asset on a route that it can more easily defend by placing additional frequency.
BMI mainline has restructed its senior management team and is now heavily focused on its arrangements with fellow Star Alliance carriers with its network analysis based around medium-haul markets from London Heathrow.
MEDIUM-HAUL GROWTH
Since 2007, BMI has introduced services to Addis Ababa, Almaty, Amman, Beirut, Cairo, Damascus, Damman, Yerevan, Freetown (Sierra Leone), Tehran, Khartoum, and Tbilisi. Its network focus is upon building new markets with leisure and business potential and is a shift away from its previous network which was largely focused around Europe and four long-haul westbound services.
The BMI network in 2007 shows markets such as Amsterdam, Lyon, Malmo, Nice and Naples which are no longer operated. Leaving the low-cost and regional operators to battle out these markets, BMI also took the decision to discontinue its long-haul westbound flying discontinuing routes to Antigua, Barbados, Las Vegas and Chicago.
BMI has taken the decision to focus on medium-haul, niche markets and concentrate its services from its London Heathrow base, having cut all its services from Manchester from which it operated four long-haul services to the US and the Caribbean and re-located the A330's to London Heathrow to concentrate flying on these new medium range markets.
BMI has the strength of the Star Alliance and Lufthansa, and London Heathrow hub to operate these destinations, where in some cases O+D potential is small, but BMI is able to draw on its Alliance and London Heathrow hub to serve markets such as Khartoum and Freetown successfully.
Its decision to enter the Tripoli market follows the strategy to serve non-EU markets where some bilateral protection is afforded. It will be able to generate strong yields in a market that BA currently serves and can focus on connecting flows to markets such as Canada to complement reasonable point to point demand. BMI also is focusing on oil and mineral markets from London, aside from also providing wet-lease arrangements with carriers such as Turkish Airlines and Austrian Airlines. These routes will also provide Star Alliance benefits to Star Alliance to take on SkyTeam to markets in Africa and Central Asia.
FLEET
BMI's mainline fleet, which consists of A319/320/321, B757 and A330-200 is now largely deployed from London Heathrow. The narrowbody jets are used for feed on important domestic routes to London Heathrow from particularly Manchester and Glasgow, but also Aberdeen, Belfast City, Dublin, and Edinburgh.
BMI operates the larger of its Airbus A321 narrowbody jets on all international destinations, with Berlin and Vienna operated with A319 equipment. Its widebody A330-200 are reserved for Saudi Arabia with services to Riyadh, Damman and Jeddah. BMI's focus on Saudi Arabia is to serve Riyadh non-stop six-times weekly whilst extending thrice weekly to Jeddah and thrice-weekly to Damman, which helps minimize the risk for the widebody service.
THE FUTURE FOR BMI
BMI will continue to expand into new markets and will retain its focus on operating to niche destinations in Africa, Middle East and the CIS. BMI has leased A330 equipment to Turkish Airlines which have been deployed Entebbe, Dar-es Salaam, Delhi and Tunis, and its long range widebody equipment will continue to be phased out as the carrier strategy will be to operate the smaller narrowbody jets into new destinations, minimizing the risks associated with commencing new routes.
Capital markets in the CIS will be on the BMI radar from London Heathrow, with the capital of Belarus, Minsk, currently having no service from London Heathrow, and Tashkent, the capital of Uzbekistan currently only served by Uzbekistan Airways showing potential for growth with over 23,000 O+D passengers having flown the route from London Heathrow between 2009 and 2010. Bi-lateral access aside, BMI will continue to analyse these mid-haul markets for new route development in 2011 offering Star Alliance an important hub at London Heathrow.
Related Content
