British Midland (BM) expects to return record profits for 1997, after having successfully fended off growing competition from low-fare airlines, and benefited from the industrial dispute at British Airways.
The news comes as the airline reveals plans for head-on competition with BAon the London-Manchester route.
BM expects to see an almost three-fold increase in profit to at least £15 million ($25 million) for 1997, compared with just over £6 million in 1996.
Sales for the first ten months of the year increased by 16% to £452 million, while traffic was up by 7%, topping the 5 million passenger mark. Load factors also climbed above 70%.
"Our view is that the market is so big now that the new low-fare airlines have not affected traffic on any of our routes," says BM chairman Sir Michael Bishop, pointing to the fact that passenger numbers on its Dublin services are up, despite competition from the most successful low-fare carrier in the UK, Ryanair.
Increased business from the BA cabin-crew strike provided a "one-off benefit of about £3 million to our profit," he adds. The airline does not expect the disruption of its London Heathrow operations in December resulting from a fire in Terminal 1, to have any major impact on its projected results.
The success has given BM the confidence to tackle BA on the Heathrow-Manchester route, which it describes as "Europe's biggest monopoly air route", estimated at 900,000 passengers this year. BMwill launch eight daily services in March using 117-seat Boeing 737-500s.
Bishop says that despite the success of 1997, he is obliged to issue a health warning for 1998, which he says will be a year of investment, with the introduction of its new Airbus A320/A321s, and the launch of the new domestic route.
Source: Flight International
