Friday, 4 May 2012

Bmibaby to close: Know the score

There has been some sad news today regarding Bmibaby. The budget airline with the catchiest name in the business is to close. Following the buyout by International Airlines Group (IAG) the industry giant has decided that Bmibaby is not a sustainable business to keep in operation. Commenting on the performance of Bmibaby Peter Simpson, bmi interim managing director, said:

"Bmibaby has delivered high levels of operational performance and customer service, but has continued to struggle financially, losing more than £100m in the last four years. In the consultation process, we will need to be realistic about our options. To help stem losses as quickly as possible and as a preliminary measure, we will be making reductions to bmibaby's flying programme from June."

The effects on passengers will be pretty severe if you have flights booked from Belfast City Airport or East Midlands after June 11 with all of Bmibaby's other routes being scrapped on September 9. It has been reported that several airlines may come in to fill some of the routes but clients need to be wary of overpriced seats due to Bmibaby's demise.

If you do have a booking directly with Bmibaby you are entitled to a full refund which you should receive within 21 working days. It is important to note that Bmibaby are not under any obligation to rebook flights for passengers affected by the closure but they have said that where possible, they will rebook passengers on an alternative Bmibaby service. This is probably no use at all as Bmibaby flights will be non existant if you are due to fly from Belfast or East Midlands.

If you have a Bmibaby flight booked as part of an ATOL Protected holiday your tour operator has an obligation to provide an alternative mode of transport or to a full refund for your holiday. If your flight is departing from Belfast and you have prepaid for parking there is some good news as George Best Belfast City Airport chief executive Brian Ambrose has stated that these clients are entitled to a refund.

It seems as though this was always going to happen and although it is very sad news for Bmibaby's 800 staff and its customers who have booked flights, it is not surprising that IAG has lopped off a business branch which leaks £25m per year. The deal to buy BMI was one done in a buyer’s market for IAG and the lucrative landing slots will repay the knockdown price IAG paid for BMI very quickly.