AIRLINE bmi (British Midland) is currently celebrating 50 years of flying people to Majorca and this week bmi's Executive Chairman, Sir Michael Bishop CBE, spoke to the Bulletin about the airline's ambitious expansion plans, the changes in the airline industry and the massive potential Majorca still has in the global luxury and quality tourism market.
When what is now bmi first flew its Dakota DC3s down to Palma in 1957 they were landing at the old Son Bonet airstrip on the outskirts of Palma. Today, Majorca is still one of their most successful routes out of Heathrow and, due to its affiliation to Star Alliance, bmi are flying passengers to Palma from as far away as the United States and Canada, two huge markets Bishop believes the Balearic tourism authorities should be making a much greater effort to capture.
Not only has the airline a long relationship with Majorca, so too does Bishop who has been visiting the island for business and pleasure since the early 60*s and since then he has not only seen the airline industry change but the holiday market as well.
Throughout the 60*s and 70*s, although British Midland was a scheduled operator, they also operated on a charter basis carrying package holiday clients for tour operators. However, in the late 70*s that all changed when British Midland started operating a scheduled service out of Heathrow and Bishop says that its daily flight has become a valuable part of our network because it provides a lot of connections to Majorca from the United States. We joined the Star Alliance in 1999, eight years ago, and that directs passengers, particularly from North America, into the UK via Heathrow and then, for example down to Majorca - and the reverse.
The Palma to Heathrow flight lands at an ideal time for people wishing to catch a connecting flight, he said.
Sir Michael admits competition in the airline industry as a whole is tough, especially on routes like Palma, but, bmi offers a full-service flight and has an extremely well established market.
What is more he revealed that Star Alliance is going to have its own terminal as part of the redevelopment of Heathrow and that it will be fully operational in time for the London Olympics in 2012.
In the meantime, however, some Star Alliance members will move into Terminal One next year once British Airways move out to their new Terminal Five.
So, we think that our link at Heathrow is going to become even more important in the future, Sir Michael said.
Bishop is extremely proud of bmi's Heathrow operations, just as he is of its low-cost bmi baby routes out of all outlets in the UK other than London Heathrow, but it is bmi which is on the verge of an exciting period of expansion and growth.
Bishop said that all European air traffic is pretty static at the moment but the growth is coming from long haul services and he agrees that it is still very much the case of the further one flies, the cheaper it is. It's much cheaper and cost effective to have airlines in the air for longer periods, he explained.
However, he did add that the poor weather that has been gripping the UK for the past ten weeks and is forecast to continue, may lead to a late surge in European ticket bookings as people rush to get away to the sun. That may contribute to a good late summer and possibly good 2008. Rain or shine in the UK, 2008 has all the hallmarks of being a very good year for bmi. We've just bought ten new aircraft, five long haul Airbus A330*s and five A321 medium range Airbus - but we've got two very important projects at the moment. What is more, this year, 2007, for the first time, our total revenue (turn over and gross sales) is likely to be approaching two billion euros and we're about to go through one of the more substantial periods of expansion for the past 30 years. In February I bought a company called British Mediterranean Airways which started life flying from Heathrow to Beirut and their name comes from the destinations they serve in the eastern Mediterranean. So, we have bought the only British carrier which flies to Beirut, Amman in Jordan, Damascus, Syria, Senegal, and the only British airline which currently flies into Tehran. The airline was a franchise operator for British Airways but over the coming months its aircraft and sales and marketing will be integrated into the bmi operation and livery. It is enabling us to serve 18 new destinations, in 17 different countries, including Ethiopia, Sierra Leone, Turkey, Sudan, parts of the former Soviet Union and Ekaterinburg in Russia, which we currently do not serve - although we do fly to Moscow and that's a very successful daily service. From October 20, we'll be operating a non-stop service from Heathrow to Cairo. Many of these routes are primarily business-orientated to countries which either have oil or gas resources and we think these markets are going to be quite important over the next few years. But, while bmi goes east this winter, Sir Michael, who has been campaigning for Open Skies for the past seven years, is also looking west as part of phase two of bmi's long term expansion plans.
The integration of the airline's latest acquisition comes first but then Sir Michael said that bmi will be looking to participate in the open skies with our Star Alliance partners between Heathrow and the United States - but we'll be making an announcement on that later in the year. The overall bmi fleet will rise next year from our present 66 airplanes to 76 and we will be serving about 27 countries in the European Union, North America and our new Middle East network - services which have a journey time of around five to six hours. We're talking 12 routes into countries which were part of the former Soviet Union, for example, the Middle East, east and west Africa. So, we'll be taking our total number of passengers carried this year to something over ten million, Sir Michael said before adding that he is very confident of the future of the new routes because they are into destinations rich in much-needed natural resources but not widely known in the western world - never mind serviced with scheduled flights from London. There is a market there, a niche market, to develop and we think we're well placed. Perhaps even more so now the low cost boom has settled down. Initially we did notice the dawn of low cost travel very much, but what is more important when someone brings in a new product is that the existing businesses keep their business but the new carriers develop new business and that certainly has been the case with the no-frills, low-cost carriers and why we introduced our own bmi baby five years ago. We've managed to develop a very particular market away from our main business at Heathrow where we are the second largest carrier with 12 percent of total arrivals and departures. But, not only has the airline industry changed with the arrival of no-frills, so too has the holiday industry says Sir Michael who was deputy chairman of Airtours from 1987 to 2001. In those days a high proportion of the traffic down to Majorca was what we would call traditional package holidays, but today that is dwindling. I think the Balearic government's tourism policy to develop Majorca as a more individual place to come to is very sound. Apart from our own particular business, the arrival of the low cost airlines means that the proportion of people coming here not on a package holiday has increased quite a lot - be they full time or part time property owners. What is more, because of the network we operate from Heathrow, a lot more people know about Majorca especially in places like North America where it is quite difficult to sell a place like Majorca. So, I do think that it is a good idea to bring a higher revenue group of people to Majorca, without being elitist, but it is also important that the island has a good cross section of tourists coming here and not just from one particular sector. We're also seeing a growth in the number of commuters. But, the more Majorca can diversify its tourism industry the better, you can't have everything coming from one single source. The States and Canada could be a good market but Majorca has to make its voice heard over there. For me the Balearics is unique to Spain and Europe - it has more to offer than Spain and having something unique is Majorca's biggest attraction. The general infrastructure and appeal of the island, I think, continues to go from strength to strength.