British Midland Airways

BMA, together with British & Commonwealth Shipping, formed Manx Airlines in 1982, and the following year BMA purchased a 75% stake in Glasgow-based airline Loganair. In March 1987 Airlines of Britain Holdings (ABH) was formed to act as a holding company for British Midland and British Midland Aviation Services. ABH became British Midland in 1997 when it was de-merged as part of wide restructuring.

A new colour scheme was unveiled in 1985. Aircraft were now painted in very dark blue, with a deep grey lower half of the fuselage and a red relief. At this time, the airline simply became British Midland, and a new logo of a stylised red BM crowned with a diamond shape appeared on the aircraft tailfins (see right). Airport lounges were introduced at UK hubs and the Diamond Club frequent flyer programme was launched. The charter market was abandoned and the 707 fleet withdrawn at this time.

In 1992, British Midland became the first airline to offer a vegetarian choice of in-flight meals on UK domestic services as well as one of the first airlines in Europe to do so. Towards the end of the 1990s, British Midland switched to Airbus and Embraer for its fleet renewal programme.

In 1999, Scandinavian Airlines (SAS), a shareholder in British Midland since 1987, sold some of its stake to Lufthansa on the condition that British Midland joined the Star Alliance. BMI joined in 2000 and launched a new corporate identity in 2001. This involved the rebranding of the airline as bmi british midland (though BMI officially does not mean anything, it implies 'British Midland International'). The new identity features a brighter blue and the replacement of the grey with white. It brings a modern, fresh appearance with sweeping curves. In 2003, the "British Midland" portion was dropped and the airline is now referred to simply as BMI. The new identity coincided with the launch of transatlantic services in 2001 to Washington, DC and Chicago from Manchester Airport using wide-body Airbus A330 aircraft. Services to Las Vegas followed soon after.

Between 1999 and 2004, Lufthansa was looking to sell its share in the airline. Virgin Atlantic was the main airline hoping to buy the shares and then forming a merger of the two airlines. A merger would bring together two well respected airlines with combined ticket sales of more than £2 billion, forming a powerful force in the aviation industry. Neither company would comment on the talks. BMI, headed by Sir Michael Bishop, is believed to have initiated the talks after it fell deep into the red following the September 11 attacks. A merger would give Virgin's Sir Richard Branson a far stronger base at Heathrow (where BMI has hundreds of valuable take-off and landing slots) to increase the competition with his rival British Airways.

The two airlines would have 17% of Heathrow slots against British Airways's 43%. British Airways was worried about the rivalry it would face if a merger went ahead, and considered the take over of either BMI or Virgin Atlantic to stop the merger of the two airlines. British Airways found it would be easier to take over the smaller airline Virgin Atlantic. In 2004 talks of any merger of the three airlines stopped.

In 2002, BMI set up a low-cost subsidiary bmibaby using redundant Boeing 737s which were displaced after BMI's fleet renewal programme favoured an all-Airbus fleet. bmibaby now flies routes between secondary airports around Europe, however it does not operate from Heathrow.

Despite the launch of transatlantic routes from Manchester, BMI has fought to gain the rights to serve the United States from Heathrow. Only British Airways, Air India, Virgin Atlantic, American Airlines, United Airlines, Air New Zealand, and Kuwait Airways are permitted to offer such routes.

BMI operated a service to Mumbai from London Heathrow between May 2005 until October 2006, after the UK and India concluded amendments to their bilateral air service agreement. Services to Riyadh followed, commencing on 1 September 2005 after British Airways ceased to serve Saudi Arabia earlier that year.

The BMI Group carried 7.95 million passengers during 2002. By 2005, the total had risen to 10.1 million, the third highest of any UK airline. (per United Kingdom Civil Aviation Authority official statistics - see reference below)

In early 2006, the Association of European Airlines reported a drop in passengers carried and load factors for BMI mainline and regional services (excluding bmibaby) whilst reporting increased loads for other AEA members over the same period. Despite this drop in passenger figures, BMI group reported [3] a pre-tax profit of £10.0 million for the year ending 31 December 2005. Today, the airline is owned by Sir Michael Bishop (50% plus 1 share), Lufthansa (30% minus 1 share) and SAS (20%).

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