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April 14, 2010    

British Midland announces cuts to jobs and flights

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by Kay Murchie
British Midland announces cuts to jobs and flights

Lufthansa has announced it is planning to save £100 million pound at airline BMI, which involves slashing almost one quarter of its capacity and the loss of 800 jobs.

The German owner also said the restructure will see BMI’s name changed back to its former name - British Midland International - believing that British Midland is a strong brand that will be more attractive to foreigners.

Last year, former BMI chairman, Sir Michael Bishop, sold his 50% to the German airline in a deal worth £220 million. Initially, Lufthansa sought another buyer for the airline, but has now opted to revamp the company itself.

The airline industry has been battered by the recession, forcing many airlines to go bust. Earlier this year, the International Air Transport Association (IATA) said 2009 saw the biggest decline in air passenger traffic since the aftermath of World War II.

BMI suffered a £155.6 million loss in 2008 and the company is predicting slightly worse results for 2009.

As a result, BMI will cut unprofitable routes and reduce the fleet from 39 to 29 aircraft. Furthermore, in an attempt to cut costs, 800 staff will lose their jobs - 670 of these have been notified or have already left.

Wolfgang Prock-Schauer, the Austrian appointed to run BMI late last year, said: “Our ambition is to become a second home carrier for the UK market. We can create a virtual network at Heathrow with our alliance airlines and that process will intensify.”

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