A "bmi is for sale" discussion

Discussion in 'bmi | Diamond Club' started by adl73x, Sep 5, 2011.  |  Print Topic

  1. adl73x
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    adl73x Gold Member

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    Last week an LH board member in addressing bmi's poor financial performance let slip the possibility that bmi may be sold.

    There has been a lot of speculation on what this means, specifically:
    * Is the sale of bmi a genuine possibility?
    * If so does it mean sold as a going concern, or is it about asset stripping and LHR slots?
    * What might this mean for Diamond Club?

    It is worth pointing out that despite many reports since last week, as far as I can tell they all reference a single source - ie. one comment on one occasion by one (albeit qualified) individual.

    It is also worth noting that this has been raised before. A Google search will easily show similar speculation in 2009 when LH were forced to honour a 10 year old agreement to take over bmi.

    Until we have more information, there is probably no need to panic. Nevertheless, I plan to curtail earning BD miles that I might not be able to redeem in the event of the worst happening.

    I am interested in what others think about the possibility, but more importantly I think we should all be looking for more facts to surface.
     
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  2. gleff
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    gleff Co-founder

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    If it's sold as a going concern, presumably Diamond Club is sold along with it and stays the same in the near-term, and new ownership makes changes to it over time just as any owner could. We don't know what will happen, especially since we don't at this point know who the owner would be.

    If its assets are sold, then Diamond Club members just get migrated over to Miles & More. I don't want my bmi miles devalued that way, but we've all internalized that expectation. Plus, I kinda want to be a LH Senator.

    My guess is that Lufthansa won't walk away from those Heathrow slots, even if they're losing money on them. That they pull back the independent bmi operation. That they eventually fold the airline as a separate entity. But that they deep down believe that the slots are valuable enough that they don't want to give up trying to make a go of something there. Even if it's just a pride thing. Though I have no inside information to support this belief.
     
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  3. adl73x
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    adl73x Gold Member

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    I agree with the LH Senator thing. It's the only reason I might try to retain BD*G.

    But since I need to do that by November, and it will be a close thing for me based on long haul travel in Nov on NZ, I will be keeping a close eye on BD sale developments, and my fallback is that those NZ miles go to renewing my newly matched VA platinum.

    My nervousness comes from it being 10 years to the day next week, when the NZ and SQ owned AN was allowed to collapse with immediate loss of all miles, status and unflown redemptions. I know it is a different decade and LH and BD are different players, but it is the same Star Alliance and I have about as much to lose, so I remain cautious.
     
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  4. Globaliser
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    Globaliser Silver Member

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    I find it difficult to imagine LH allowing BD to collapse in the same way, because the LHR slots are worth so much money. If LH is to extract decent value for those slots, there would have to be an orderly wind-down of some kind. I think that very fact makes it unlikely that BDDC would vanish in a puff of smoke - although what it would become is another question entirely.
     
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  5. mowogo
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    mowogo Gold Member

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    I think it really depends on how the deal would be structured, and who it is sold to. The classic rumor is that it will be sold to Virgin, give them a short haul network and get them in the *A. In this case, LH might not pillage the slots as much as they might for any other airline they sell it to.
     

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