IAG and Lufthansa reach agreement in principle on the sale of British Midland Ltd.
Dec 3, 2011, 4:41 am
#436
Join Date: Sep 2010
Location: UK oop north
Programs: BMI Diamond Club RIP,BAEC Silver
Posts: 1,692
FFP's cannot be seen purely as an isolated stand-alone business. They are loyalty programmes so the loyalty generation aspect is the key consideration.
The purpose of them primarily is to encourage customers to spend their cash on the flights in order to generate the FF points/miles. Very few DC customers are FT savvy. Very few DC pots are constructed in the way that FT'ers have populated their accounts. Most accounts are largely full of points earned the hard way. It's how much incremental business BMI believed they had earned from offering a world beating FFP that is the key consideration for them in deciding the profitability of DC.
It isn't just a matter of redemptions cost and miles selling to partners.
The purpose of them primarily is to encourage customers to spend their cash on the flights in order to generate the FF points/miles. Very few DC customers are FT savvy. Very few DC pots are constructed in the way that FT'ers have populated their accounts. Most accounts are largely full of points earned the hard way. It's how much incremental business BMI believed they had earned from offering a world beating FFP that is the key consideration for them in deciding the profitability of DC.
It isn't just a matter of redemptions cost and miles selling to partners.
The one banker for BD will have been the positive cash flow benefit of DC whilst we we all earning. But now we are all burning, that benefit to BD reduces,allbeit that they won't pay partners, Hopefully!, till after we've flown...
I reckon it is exactly a case of redemptions cost and miles selling to partners. As others have said maybe a 2 for 1 switch into BAEC is the best we can hope for
Dec 3, 2011, 4:50 pm
#437
FlyerTalk Evangelist
Join Date: Feb 2000
Location: London, UK and Southern France
Posts: 18,364
DC has zero strategic importance to BA to the raw numbers would have to work pretty well to be worth the effort and complication of another non-core unit. While I have no insider knowledge whatsoever nor any hands on experience of the economics of FFPs, I have my doubt that the figures would stack up impressively enough for DC to be really worth it for BA.
Dec 4, 2011, 4:56 am
#438
Moderator, Turkish Airlines Miles&Smiles & Accor ALL
Original Poster
Join Date: Apr 2009
Location: BRU
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WW on Sky News this morning on BD: Still doing due diligence, IAG are not the only bidder for BD and negotiations are not exclusive, IAG bid the best to ensure continuing connectivity at LHR. Or so he says....
Dec 4, 2011, 9:20 am
#439
Join Date: Dec 2007
Location: ORD
Programs: BA, AA, SQ, UA, AC, WS, MR TIT
Posts: 8,658
Whoops. That means that VS offer is still on the table.
Dec 4, 2011, 9:39 am
#440
Moderator: British Airways Executive Club, Iberia Airlines, Airport Lounges and Environmentally Friendly Travel
Join Date: Jan 2003
Location: London, UK
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Dec 4, 2011, 9:43 am
#441
Join Date: Oct 2009
Location: Scotland
Programs: BA Silver, Hilton Diamond, BD Blue (RIP)
Posts: 1,981
Most interesting quotes from Mr Walsh being:
and
The full interview is on the Sky News iPad app. I can only find a short clip on the Sky News website referring to APD and not the bmi deal
We don't have exclusive negotiations with Lufthansa
I believe that the British Airways/IAG... is the only one that's likely to retain those [referring to Belfast City route] links to Heathrow
Dec 4, 2011, 11:26 am
#442
A FlyerTalk Posting Legend
Join Date: Aug 2006
Location: Argentina
Posts: 40,210
Dec 5, 2011, 12:15 am
#443
Join Date: Jun 2002
Location: London, UK
Programs: BA Gold(OWE), QF LTG, MR Plat, IHG Spire, Hertz PC
Posts: 8,156
Dec 5, 2011, 2:36 am
#444
Join Date: Sep 2006
Location: Manchester, England
Programs: Bonvoy LT Plat, HH Diamond, IHG Plat, BMI Gold (RIP)
Posts: 8,021
Even if they aren't successful in derailing the IAG bid, they have potentially done LH a favour in helping their negotiations on some of the areas that were still under discussion with IAG.
Dec 5, 2011, 8:09 am
#445
Join Date: Oct 2010
Location: England
Programs: BD*G, A3*G, Alaska G, LH, HHonors, Accor, Priority Club; Tufty Club Diamond
Posts: 80
If fly almost exclusively Y, because that's all that work pays for. For me, status matters. It's the difference between having a good chance of a free upgrade to Y+, and sitting in a rubbish middle seat in row 57. It's a free drink and comfortable seat in an airport lounge rather than a sticky table in a Wetherspoons airport pub.
I for one started with DC becuase I was doing quite a bit of flying to places like AMS which were served by BMI from Heathrow. The only thing that has really pushed me away from being a more regular BMI flyer is the erosion of routes, especially that one. Lufthansa have probably been the main beneficiary of Euro route erosion, rather than BA, because of my access to lounges (albeit AMS is a bad example there, but you get the point)
Being adopted into the BA scheme on good status terms would probably be a good incentive for me to favour them over KLM and Lufthansa, all other things being equal.
Quite how much they need a few more flights from a fortnightly cheapo-Y flyer who does a handful of TATLs a year, I'm not sure.
I for one started with DC becuase I was doing quite a bit of flying to places like AMS which were served by BMI from Heathrow. The only thing that has really pushed me away from being a more regular BMI flyer is the erosion of routes, especially that one. Lufthansa have probably been the main beneficiary of Euro route erosion, rather than BA, because of my access to lounges (albeit AMS is a bad example there, but you get the point)
Being adopted into the BA scheme on good status terms would probably be a good incentive for me to favour them over KLM and Lufthansa, all other things being equal.
Quite how much they need a few more flights from a fortnightly cheapo-Y flyer who does a handful of TATLs a year, I'm not sure.
Dec 6, 2011, 10:17 am
#446
Join Date: Jun 2008
Programs: Various memberships
Posts: 532
http://www.bloomberg.com/news/2011-1...rea-to-kl.html
Does read like pretty much a done deal
British Airways will probably target Korea, Malaysia and other high-growth Asian markets as it examines how to make the best use of operating slots at London’s Heathrow airport on offer with the takeover of BMI.
“We’re still moving forward” with the acquisition and currently doing due diligence on BMI, said Laura Goodes, a spokeswoman for IAG.
Dec 8, 2011, 1:41 pm
#447
Join Date: Feb 2006
Location: NUE,MUC,INN,FDH
Programs: QF LTG, LH (SEN*** till 02/26), AF, AA, AB-G†
Posts: 2,076
I really believe it when it really happens!
Dec 13, 2011, 2:35 am
#448
Join Date: Mar 2002
Location: DUB - Ireland
Programs: EI-GCE, BD-G, BA-G, A3*G, TK*G, FB-G, HH-G, Hyatt-Dia
Posts: 8,527
As Virgin is now officially at the table, this section of the saga is over and a new one begins. Please continue to follow the yellow brick road (the one with grey piping 
) in the follow-on thread:
http://www.flyertalk.com/forum/bmi-d...lines-ltd.html
GoldCircle
bmi forum Mod team
) in the follow-on thread: http://www.flyertalk.com/forum/bmi-d...lines-ltd.html
GoldCircle
bmi forum Mod team