bmi’s baby – The Story Of The Low Cost Subsidiary

British Midland (BD) was once a major force in the UK and European aviation scene. Its boom time during the 1980s saw it become a significant thorn in its arch-rival British Airways (BA) side. 

However, by the turn of the new millennium, BD, like many of its legacy counterparts, struggled with the growing number of low-cost carriers (LCCs) encroaching on their markets. 

Indeed, flag carrier BA had not been immune to this impact. In May 1998, it launched its own LCC Go Fly, or Go (GO) for short. 

British Midland had long resisted the urge to establish a no-frills arm. However, management had discussed plans in the Spring of 2001 with research highlighting the eight million passengers living within an hour’s drive of East Midlands Airport without LCC to serve them. However, the launch of bmi’s long-awaited transatlantic operations planned for May 2001, plus the impact of the 9/11 terrorist attacks, saw the moment to launch the new subsidiary pass.  

Marking Its Territory

But in December 2001, Go announced that it was to open its third base at BD’s home territory, East Midlands Airport (EMA). 

The airline’s owner Sir Michael Bishop was not about to take this lying down. So on January 24, 2002, bmi (as British Midland was now known) gave birth to its new low-cost brand and called it ‘bmi baby.’ At the time, Nigel Turner, the bmi boss responsible for the new offshoot, said they were launching the new LCC in “response to a clear market opportunity and consumer demand.”

The new subsidiary would inherit a pair of 148-seat Boeing 737-300s from its parent, launching flights to Barcelona (BCN), Dublin (DUB), Faro (FAO), Malaga (AGP), Murcia (RMU), Palma (PMI) and Prague (PRG) from March 23, 2002. Services to Ibiza (IBZ) would begin in May. 

A high profile marketing campaign ensued with 16,000 free tickets distributed, and almost 50,000 seats sold in the first few days of them going on sale.

Not Just An Airline-Within-An-Airline

From the outset, management at the airline had planned to ensure that bmi baby (WW) would not be a half-hearted attempt at an offshoot. Its rivals were less convinced. easyJet (U2) Chief Executive Ray Webster was adamant that an LCC could not be born from a high-cost operation like bmi. Ryanair’s (FR) Michael O’Leary saw the move as “a late, kneejerk reaction,” while Barbara Cassani of Go warned that this tactic had been “tried in the US, and failed every time.”

With £5 million starting capital, they hired Ad agency Partners BDDH to create a unique and catchy name. Its branding and livery were designed by non-other than the famous Landor Associates, who had also made the new branding and livery for its parent.

Landor closely aligned the branding of the two airlines, keeping the red, white and blue colours of bmi for bmi baby. The main difference was that bmi baby used a mascot known as ‘Tiny,’ to imply a young, agile and fun airline with personality.

Spreading Its Wings

bmi baby’s first flight took off from EMA bound for AGP under a flurry of press attention on March 20, 2002. The airline exceeded expectations within its first year of trading by 100%. 

In July 2002, WW announced that from March 2003, it would open its second base at Cardiff Airport (CWL) with two Boeing 737s. The move came after an intense review, studying a wide range of airports for the new base. 

Speaking at the time, Tony Davis, Managing Director bmi baby, said: “We have already seen the great advantages for travellers in giving them their own local low-cost airline. Cardiff International has a large potential catchment area in both Wales and England, and I am convinced that they will give bmi baby the same resounding thumbs up that we have seen at our East Midlands Airport base.”

Meanwhile, Jon Horne, Managing Director of CWL, said: “I am delighted that bmibaby has selected Cardiff International Airport to be the next base for the airline. There was clearly strong competition from other UK airports to win the award of this base, as the commercial potential is significant.”

The move also saw WW become the UK’s second-largest low-cost carrier in terms of destinations served. This followed the acquisition of Go by easyJet in May 2002. Over 700,000 passengers were carried during 2002, with the airline achieving an almost perfect punctuality record. 

At the time, WW operated a total of 13 routes. Additional services were launched to Amsterdam (AMS), Belfast International (BFS), Brussels (BRU), Edinburgh (EDI), Glasgow (GLA), Paris (CDG), Jersey (JER), Salzburg (SZG) and Toulouse (TLS).

bmi Inheritance

bmi then revealed that it would be transferring the rest of its 737s to its low-cost arm, following its move to an all-Airbus fleet. This caused some concern with mainline pilots, who were told that they would have the option of working for WW. 

It also announced that it would hand over its entire mainline operation at EMA to its LCC subsidiary. The carrier now had nine 737s based at the facility, and its focus shifted to growing passenger numbers to two million per year. 

bmi Chief Executive Austin Reid said: “An opportunity exists for us to develop the low-cost part of our business at a time when the industry faces considerable competition and lower fares.” He described WW’s EMA and CWL expansion as laying a “sound foundation” for growth.

New routes would be added to Copenhagen (CPH), Cork (ORK), Geneva (GVA), Lyon (LYS) and Milan (BGY) for winter 2002. However, it would drop flights to RMU and IBZ. The carrier also announced that it was looking to attain its own Air Operators Certificate (AOC) to become ‘in every sense,’ an airline in its own right. 

Moving North

Despite discussions with Newcastle (NCL) to establish a new base, WW unveiled Manchester (MAN) as its third hub in March 2003. Initially, the carrier would operate six routes with up to 50 flights per week to Alicante (ALC), AGP, RMU, PMI, BFS and ORK. 

“Manchester airport already has one of the most comprehensive ranges of airline operators in Europe and the largest range in the UK outside London,” said John Spooner, Managing Director of MAN. “We’re extremely pleased to add the bmi baby brand name to that uniquely wide range. bmi baby are a very strong player in the ‘no frills’ sector so, in that regard, they are particularly welcome.”

Two months later, Teeside International Airport (MME), which had ‘always been a target for bmi baby,’ was revealed as the fourth base with two 737s. At the airline’s request, MME was renamed Durham Tees Valley Airport. WW initially flew to AGP and BFS. Nice (NCE), ALC, JER, PRG and PMI were later added. The base remained open until the end of summer 2006. 

On April 30, 2004, WW launched operations from easyJet territory, London Gatwick (LGW), with flights to PRG and ORK. Speaking of the move, Tony Davis said: “The original business model of the low-cost carriers in Europe was to take on the flag carriers because it offered easy pickings. The fare differentials were dramatic, and it enabled the budget operators to gain a foothold very quickly. But as the market becomes more congested, the opportunities to compete against just one incumbent high-cost carrier are becoming more and more scarce. The nature of the market is changing and…there is now much more competition between low-cost airlines. We believe London Gatwick offers the right catchment profile for our South East base. Importantly, it also offers capacity for growth in the future.”

Growing Up

In March 2004, WW teamed up with Air Wales (6G) at Cardiff, launching a first of a kind agreement for a LCC in the UK and handing over several of its poorer-performing routes to 6G under a code-share agreement. But in December 2005, WW cut its ties with the Welsh carrier due to its unstable financial position and took back routes it had handed over.

Expanding its operations in the Midlands, bmi baby unveiled its fifth base at Birmingham Airport (BHX) in August 2004. Flights, with three aircraft, launched in January 2005 to Edinburgh (EDI), ALC, AMS, BFS, GVA, NOC, AGP, PMI and PRG. Its launch became bmi baby’s most successful to date, and soon BHX would become the airline’s biggest base. Within three years of opening, it had become the airport’s biggest operator. 

Sir Michael Bishop also revealed they were looking to establish several European bases. “We are looking at it very carefully,” he said at the time. The move, he added, could come within the next three years “if the carrier meets its business objectives.”

During its initial years, bmi baby focused on leisure passengers. But in March 2007, it announced a shift to cater for the growing number of business travellers. The airline offered various services previously unknown to LCCs, including ticket flexibility and lounge access. Passengers could also earn points on mainline bmi’s ‘Diamond Club’ frequent flyer program.

When rival easyJet announced its departure from EMA in September 2009, WW reaffirmed its commitment to the base by adding three more aircraft and open eight new routes. Frequencies would also be added to existing services. The changes meant the carrier would increase capacity at the base by 40%. 

New Parents

In May 2009, financially struggling bmi had a new owner, Lufthansa (LH). The German flag carrier quickly set about turning around the airline’s fortunes, including a complete review of WW’s operations. In November 2009, management announced that 158 staff would be made redundant as they cut the fleet from 17 aircraft to 12.

The restructuring was blamed on the “worst economic recession in recent times and record losses in the aviation industry.” Cautious development was on the agenda with bmi baby now focusing its activities “on the routes where there are clear indications and prospects for future growth and development.”

With a new year came a new CEO under the guise of Julian Carr. His first move was to develop a ‘five-year plan’ to outline bmi baby’s future network and fleet structure after LH announced it planned to retain the low-cost subsidiary. 

At the time, Mr Carr told Air Transport Intelligence News, “We need to ensure this year works. This is a year of stability for the company, after the impact of fuel prices, the recession and uncertainty surrounding our ownership.” 

“We are not trying to be Ryanair or EasyJet,” he added. “We will continue competing on core low-cost routes, which are working, but our goal is to do well rather than saturate the market. There’s a lot of competition, so there’s no point in adding to it.”

WW also hoped to build cooperation with LH’s low-cost arm Germanwings (4U). “We are working on ways to integrate with the other group companies in a way which is not complex,” Carr stated. “In the future, there may be opportunities to do more with Germanwings, but whether this will ever translate into a more integrated connection is unknown at this stage.”

Management also revealed it had no plans to renew its fleet, despite rumblings of a potential Airbus order. “At the moment, the 737 ‘Classic’ is working well for us. Fleet renewal is not top of the agenda,” Carr said. He added that there was ‘no pressure’ from Lufthansa to replace the jets. “The aircraft which we work with in the future will be the right one for our business.”

Base Closures

Despite a positive outlook, the airline announced on April 13, 2011, the closure of its Cardiff (CWL) and Manchester (MAN) bases after the summer 2011 season. Two of the 737s would be used to open a new base at Belfast City Airport (BHD), moving its entire operation from BFS, which it had served for many years. The remaining two airframes would go to EMA and BHX.

A spokesperson for the airline said at the time, “We’re looking to optimise our route network and reallocating aircraft where there is the best potential for strong growth.”

On December 22, 2011 LH announced its intention to sell bmi to BA owner, the International Airlines Group (IAG), for £172.5 million. The sale did not include WW or bmi regional (BM), which LH hoped to sell separately before completing the main deal. If the pair could not be sold, this would significantly reduce the price IAG would pay for bmi.

An un-named buyer was announced on March 5, 2012. The UK-based company signed a non-binding agreement, and in a statement, bmi said that the buyer had ‘operations in several countries across Europe’ and planned to acquire 100% of WW’s shares. The buyer planned to continue with the ‘baby’ brand for an interim period and that the head office would stay at EMA.

A spokesperson said: “bmi baby has attracted a great level of interest and our discussions open up great future prospects for the airline and its employees.”

Another potential suitor was German turnaround specialist Intro Aviation. However, negotiations ended after LH rejected its non-binding offer for the budget carrier.

The End

Unfortunately, the deal could not be agreed upon by the March 31 transaction deadline. Therefore bmibaby and bmi Regional were taken over by IAG and immediately put up for sale. But both units were unwanted by the new owner, with IAG stating: “bmi baby and bmi regional are not part of IAG’s long-term plans and will not be integrated into British Airways.”

By May, IAG announced that if a buyer could not be found by September 10, it would have no choice but to close the airline down. In a statement, bmi’s Interim CEO Peter Simpson said: “bmi baby has continued to struggle financially, losing more than £100 million in the last four years.”

“To help stem losses as quickly as possible and as a preliminary measure, we will be making reductions to bmi baby’s flying programme from June.” 

All flights to BHD, between EMA and AMS, EDI, GVA, GLA, Newquay (NQY), NCE and CDG, and those between BHX and AMS and ORK would cease on June 11.

Sector Aviation holdings would take over bmi Regional for £8 million. It launched independent operations under the same name in October 2012.

bmi baby was not so lucky. Its final flight WW5330 touched down at EMA from Malaga on September 9, 2012. Its fleet was transferred to be stored at Norwich (NWI) and Lasham Airfield (QLA). 

The ‘Airline with Tiny Fares’ had brought low-cost travel to major airports such as Birmingham and Manchester that had previously shied away from LCCs. It played an important role in the development of low-cost air travel in the UK.

Fleet List

Registration	Aircraft Type	Notes
G-ECAS	Boeing 737-300
G-OJTW	Boeing 737-300
G-ODSK	Boeing 737-300	‘Dragonfly Baby’
G-OBMP	Boeing 737-300	‘Robin Hood Baby’
G-BYZJ	Boeing 737-300	‘Pudsey Baby’
G-OGBD	Boeing 737-300	‘Little Duncan’
G-OGBE	Boeing 737-300
G-TOYB	Boeing 737-300
G-TOYA	Boeing 737-300	‘Brummie Baby’
G-TOYC	Boeing 737-300
G-TOYE	Boeing 737-300
G-TOYD	Boeing 737-300	‘Surf’s Up Baby’
G-TOYF	Boeing 737-300	‘Rainbow Baby’
G-TOYH	Boeing 737-300	‘Baby of the North’
G-TOYG	Boeing 737-300	‘Butterfly Baby’
G-TOYJ	Boeing 737-300	‘Pudsey Baby’
G-TOYK	Boeing 737-300	‘Jump in Baby’
G-TOYI	Boeing 737-300	‘tinylife baby’
G-TOYM	Boeing 737-300	‘Groovy Baby’
G-TOYL	Boeing 737-300	‘Rainbow Baby’
G-BVZH	Boeing 737-500
G-BVKB	Boeing 737-500	‘Jelly Baby’
G-BVZE	Boeing 737-500	‘Little Costa Baby’
G-BVKA	Boeing 737-500
G-BVZG	Boeing 737-500
G-BVKD	Boeing 737-500	‘Ice Ice Baby’
G-BVKC	Boeing 737-500
G-BVZI	Boeing 737-500

N.B. The author does not own the rights to any of the images included in this article unless otherwise stated.

© Jet Back In Time by Lee Cross