Saturday, February 03, 2007

BMI comes to the rescue of BMed

BMI British Midland, the UK airline, is rescuing the heavily loss-making BMed, formerly known as British Mediterranean Airways, a franchise carrier of British Airways.
Nigel Turner, chief executive of BMI, said on Friday the group was injecting £30m in fresh equity into BMed and would acquire a 99 per cent stake. It also planned to buy the outstanding 1 per cent held by the existing shareholders.
The acquisition would enable BMI to accelerate its creation of a medium and long-haul network out of London Heathrow, its main base and also the operating base of BMed, said Mr Turner.
In the last couple of years BMI has opened long-haul routes from Heathrow to Riyadh and Jeddah in Saudi Arabia, filling a vacuum left by the earlier withdrawal of British Airways, and has also opened a route to Moscow. It has withdrawn from its short-lived attempt to operate a daily service to Mumbai, India, however, in the face of tough competition from BA and Virgin Atlantic as well as from India’s Jet Airways and Air India.
With BMed, BMI will acquire a network of 17 destinations in 16 countries chiefly in the Middle East, Central Asia and Africa.
02/03/07 Kevin Done/Financial Times, UK
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