Sunday, January 6, 2008

BMI


British Midland is seriously scouting the market for used B 762ERs and used B 763ERs as it feels that the A 320s and A 321s that it currently uses on the ex BMED routes to Africa and Central Asia are too small to meet market demand + they cannot carry extra revenue generating cargo in the belly. BMI also revealed that its new business strategy is to "Look East" to expand rather than risk a bloodbath by rapidly expanding trans-atlantic operations which would lead to a fares war.

Analysis:

This is a smart move by BMI to base its medium/long haul expansion around the emerging markets of Central Asia, South East Asia and the Middle East. They are members of Star Alliance so instead of wasting money by flying their own aircraft to multiple cities from LHR, they can easily codeshare with fellow STAR partners i.e. UAL & US Airways on their LHR-USA-LHR flights.

With regards to the ex BMED routes, some like TAS, ALA and IKA see flights flown by A 320/A 321s which at times suffer payload restrictions if the route is flown nonstop or they are routed via another city. This diluted the revenue and marketing feasibility of operating the flights. For Central Asia and West Asia flights (BEY/DAM/AMM), the ideal aircraft for BMI to use would be the B 762ER.

As far as which new "emerging markets" BMI should look into, ones that come to mind are LHE, DMM, DAC, BLR, HYD & IKA. For all these cities, the ideal aircraft to acquire are used B 763ERs which are available in the used aircraft market. In total 13 used B 763ERs can be leased or bought from various companies. These aircraft were built between 1989-1994 and their specifications can be viewed here :

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