Company Watch - British Airways.

Mar 12, 2007

BMED will continue to fly for BA until Oct. 28, when it will become part of bmi and operate under the latter's AOC. BA will retain codeshare rights on former BMED routes but remaining ties, including livery and uniforms, will disappear. Bmi said it will roll out a new medium-haul product "combining the best of BMED and the best of bmi." Cockpit and cabin crew will undergo a "gradual phased integration" and BMED's front office functions will be absorbed. Turner said bmi would "be doing everything possible" to minimize the number of redundancies. BMED operates five A321s and three A320s to 17 destinations in 16 countries. Mar 8, 2007

Bmi is reconfiguring and expanding its regional and medium-haul operations following its acquisition of British Airways franchise partner BMED and BA's sale of BA Connect to Flybe, which was finalized Monday. Tuesday bmi unveiled its plans for BMED, in which it acquired a 99% stake last month through a [pounds sterling]30 million ($57.8 million) share subscription. "To achieve this kind of growth without the acquisition and integration of BMED could take years to achieve," bmi CEO Nigel Turner said. Mar 8, 2007

British Airways yesterday also released guidance for the fiscal year ending March 31, 2008, saying it is "on track" to achieve a 10% operating margin. It expects a 6.5% margin in the current FY, which it described as "challenging." It projects a 5%-6% year-over-year increase in revenue for FY08; guidance for this year is a 3.25%-3.75% rise over FY06 revenue of [pounds sterling]8.52 billion. An increase of 4%-5% was forecast before the aforementioned disruptions. Expenses are expected to climb approximately 5.1% to [pounds sterling]8.21 billion this fiscal year but then grow just 1.8% in FY08, with both increases largely based on fuel. BA said yield is expected to lift 3.4% in FY08. Mar 8, 2007

British Airways shares drop after open-skies agreement British Airways shares fell after the U.S. and EU reached a preliminary open-skies agreement that would open up London Heathrow Airport to new competition. "The deal agreed last week could have deep implications for the airline, when you consider that the majority of British's profits come from routes on the North Atlantic," said Gert Zonneveld of Panmure Gordon, a brokerage firm. The chairman of BA said the agreement favors U.S. interests and that Heathrow could have trouble handling the surge in flights. Mar 6, 2007

British Airways said at its Investor Day yesterday that the impact of August's terror alert, fog, baggage belt failures at London Heathrow and January's planned cabin crew strike will cost it [pounds sterling]200 million ($385.1 million). CFO Keith Williams also revealed that the sale of BA Connect to Flybe will cost the carrier an additional [pounds sterling]130 million, including [pounds sterling]96 million in cash paid to Flybe. CEO Willie Walsh had said that no money would change hands in the transaction Mar 8, 2007

Flybe has completed on its acquisition of British Airways' regional operation, BA Connect. There will be a transition period until 25 March while the carrier hands over responsibilities, and BA Connect services will retain their BA flight code for a minimum of 12 months after the transition is concluded. Mar 6, 2007 03/12/2007

Editor: Aram Gesar, eMail: [e-mail] For Air Transport & Travel Business Experts contact eMail: [e-mail]

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Mar 5, 2007