Rail services harming domestic flight market - BMI
Derby-based airline BMI is facing increased competition from UK rail companies, Insider has been told. Steven Griffiths, business director of BMI Regional, said the airline's domestic market was being "hurt" by more efficient rail operators and suggested it would continue to expand its services abroad in an attempt to boost revenues.
He said: "Increased competition from the rail companies – making trips quicker and easier – is hurting the UK domestic market. The UK APB tax doesn’t hurt the cause, either.
"We find it difficult on the short domestic routes with our equipment and we need to be looking over water to make anything work."
Earlier this month, BMI announced it would expand its overseas offerings by introducing a route from East Midlands Airport to Frankfurt, the world's ninth largest airport.
"Germany has always been a popular destination and by offering direct flights from East Midlands Airport to Frankfurt we can meet the increasing demand from business and leisure travellers," said Griffiths. "People living in the East Midlands now have the opportunity to travel to a wide range of worldwide destinations from their local airport."
The service will run three times each day, Monday to Friday.
Griffiths's comments come just weeks after it was announced that the Derby-based airline was losing £38 per passenger in its year-end results.
BMI recorded a total operating loss of £105m for the first half of 2011, according to figures in its parent company Lufthansa's financial accounts.
The figure represents a 29 per cent decline on the first six months of 2010.
After BMI's results were unveiled, rumours have persisted that Lufthansa is keen to sell the loss-making subsidiary.
The parent company itself made a slight profit of £2.6m in the first six months of the year.
In June, International Airlines Group (IAG) confirmed to Insider that it was interested in acquiring BMI, but admitted "the ball is in Lufthansa's court."
It is thought that the airline's coveted take-off and landing spots at Heathrow Airport would be a major advantage for any potential buyer.
