UK carrier bmi is looking to cut its workforce by up to a third as it strives to return to profit, while it continues to explore a possible link up with Virgin Atlantic Airways.
The carrier aims to take up to £100 million ($166 million) of costs out of the business over the next three years as part of its Project Blue Sky business review that began last year.
Bmi insists that the job cuts, up to 1,500, will come about through natural wastage, and will mainly be aimed at areas with a high staff turnover, such as check-in and ground handling.
"To continue to improve we must continue to remove unnecessary cost from our business model - without compromising the full-service offering," says chief executive Austin Reid. For example, bmi is looking at a greater use of internet bookings and e-ticketing, and is studying the possibility of passengers checking in at home on their PCs.
The carrier is streamlining its fleet around the A320 family, with its Boeing 737-300/500s all operating for low-cost subsidiary bmibaby. The carrier plays down reports that bmibaby, launched last year, is looking to set up a London base, saying only that this is a possibility "a long way down the line". London is easily Europe's most developed low-cost market.
Meanwhile, the carrier says it has been in merger talks with Virgin Atlantic, but denies they have reached an advanced stage. However, bmi says there have been several meetings in recent years, during which the possibility of a merger has been examined. A tie-up would provide bmi with a transatlantic link from its London Heathrow hub, and would give Virgin valuable slots and European feed capability at the same airport.
The Virgin talks and the cost saving plans come on the back of a £19.6 million loss in 2002.
COLIN BAKER LONDON
Source: Airline Business
