British Midland is planning a major expansion into the third-party maintenance market, with the formation of British Midland Engineering, a new subsidiary company based at East Midlands Airport in the UK. The airline is also setting up a separate ground-handling company to expand its services in this area.
The carrier's existing maintenance activities will be spun off into the new standalone company, which has plans to move to a larger site and eventually offer up to 50% of its capacity to third parties.
Austin Reid, British Midland managing director, confirms "plans to expand "this area of the business. "We are looking at facilities - there are various options," he says.
British Midland Engineering will initially overhaul Boeing 737s, Airbus A319/A320/A321s and Fokker 70/100s at East Midlands Airport, and offer line maintenance services at London Heathrow. The company will sit alongside British Midland Handling Services, as part of British Midland Aviation Services, a new sister company of the airline, within parent Airlines of Britain Holdings (ABH).
Meanwhile, ABH has announced pre-tax profits of £8.5 million ($13.9 million) for 1996, compared with £6.2 million a year earlier, to which British Midland contributed £7.1 million. Group turnover was up by 12% to £623.8 million, from the 1995 figure of £558.9 million, with passenger traffic up by 7%, to 7.7 million.
British Regional Airlines and Manx Airlines were de-merged from ABH in February 1997, and will report their results separately.
Sir Michael Bishop, ABH chairman, describes the 1996 results as "a satisfactory improvement in performance during a period of unprecedented competition. Clearly the emergence of low-cost carriers [in Europe] has had a significant effect," he adds.
British Midland will inaugurate a service from London to Cologne, Germany, and on to Rome, Italy (using fifth-freedom rights), from 26 May in a codeshare agreement with Lufthansa, although the airline has decided not to join the recently unveiled "Star Alliance".
The first of 20 recently ordered A320/A321s, of which 12 are to be leased from International Lease Finance, will be delivered early in 1998. An engine selection is likely to be announced at the Paris air show in June, says Bishop.
Source: Flight International
