British Midland Regional Future???

This post is an update of my earlier post: Bye Bye BMI.

Sector Aviation (previously known as Granite Aviation) successfully bought Scottish based bmi British Midland Regional Limited for £8 million cash from International Airlines Group (British Airways/Iberia). Handover was completed June 1. IAG inherited bmi Regional when it bought British Midland from Lufthansa earlier in 2012.

This sale included all of bmi Regional’s fixed assets and long-term liabilities, including owned and operating lease aircraft. The carrier has 19 Embraers.

Sector Aviation is led by Ian Woodley who is now Chair of bmi Regional. In 1987, Woodley founded Business Air. It became BMI Regional in 2001, after being sold to British Midland in 1996 so the carrier has come full circle. The consortium also includes Stephen and Peter Bond, part owners of Bond Offshore Helicopters who are also investors in Scottish airline Loganair.

It is hard to know what the outcome will be for the loss making airline. The owners have said they will keep the same name and enter a period of consolidation. I feel that there are three issues:

bmiRegional used to feed passengers into its British Midland owner and the Star Alliance network. For example, they used to be able to fly passengers from Aberdeen to Frankfurt and connect to Lufthansa flights to anywhere in the world or Aberdeen -London and onto British Midland. They are now a standalone carrier with a small Scottish-European route network. They will need to develop some partnerships in order to survive
Their planes are very small (37 and 49 seats) so fares will need to be high in order to break even
The outlook for the UK aviation industry is bleak for the next few years. With the Air Passenger Duty continuing to increase

I wonder if we will see a Loganair/FlyBE/bmi Regional merger eventually?