British Airways Acquires British Midland Airways, Forecast Net 1,200 Layoffs


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British Airways Acquires British Midland Airways, Forecast Net 1,200 Layoffs

By Eddy Metcalf

April 15, 2012 - British Airways began consultation with trade unions on proposals to integrate BMI mainline into its operations at Heathrow. The acquisition of BMI by British Airways’ owner, International Airlines Group (IAG), was given regulatory approval from the European Commission in late March.  

BMI is losing more than £3m a week and, without this acquisition, was facing closure with the potential loss of all 2,700 UK based jobs. The consultation proposes the full integration of BMI mainline into British Airways securing approximately 1,500 jobs. The integration proposals could result in up to 1,200 layoffs.  

British Midland Airways Limited is an airline based at Donington Hall in Castle Donington in the United Kingdom, close to East Midlands Airport.

The airline flies to destinations in Europe, the Middle East, Africa and Central Asia from its operational base at London Heathrow Airport, where it holds 11% of all take off and landing slots and operates over 2,000 flights a week. BMI was a wholly owned subsidiary of Lufthansa.

Jobs secured under the proposals include the transfer to British Airways of around 1,100 cabin crew, pilots and engineers based at Heathrow. Up to 400 passenger services jobs would be secured at Heathrow Terminal 1. The proposed UK layoffs consist primarily of roles based at BMI’s head office at Castle Donington and at regional airports. Formal talks will seek to reduce the number and mitigate the impact of the proposed layoffs, including the potential to offer vacancies within British Airways at Heathrow.  

British Airways will also be working on potential job opportunities with industry partners in the Midlands, such as Rolls-Royce, and will look to create jobs at its engineering facility in Glasgow from January 2014 when the contract for BMI aircraft heavy maintenance work outside the UK expires.  

Keith Williams, British Airways’ chief executive, said: “BMI is heavily loss making and is not a viable business as it stands today. Our proposals would secure around 1,500 jobs that would otherwise have been lost. As we look to restructure the business and restore profitability, job losses are deeply regrettable but inevitable. We will work with the unions to explore as many options as possible and are already working with industry partners.  

“This deal is good news for our customers and will offer new destinations, new routes and new schedules in due course. For customers with BMI bookings to or from Heathrow this summer, it is business as usual and customers can continue to book with confidence.” 


As announced on December 22 last year, Lufthansa is to take on BMI’s defined benefit pension scheme before completion of the transaction, which is expected to take place around April 20. This scheme has been closed and the terms on which pensions will be retained will be agreed between Lufthansa and the BMI pension trustees.  After completion, British Airways intends to maintain the BMI defined contribution pension arrangements for BMI employees with the potential, subject to the outcome of consultation, to transfer some or all of the BMI employees to the British Airways defined contribution scheme.  

The acquisition of BMI mainline will give British Airways an additional 56 average daily slot pairs at Heathrow, of which up to 14 will be available to other carriers. Retained slots will be used to expand British Airways’ operations at Heathrow with customers benefiting from new destinations and more convenient schedules.
The proposed integration would also include repainting the BMI mainline aircraft in British Airways’ livery. Discussions with potential buyers for BMIbaby and BMI Regional are continuing.

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