BMI Unit Shunned by British Airways Plans North Sea Oil Shuttle

BMI Regional, spurned by British Airways (IAG) when it bought the former British Midland unit of Deutsche Lufthansa AG (LHA), plans to target oil industry executives with services across the North Sea ignored by bigger carriers.

BMI Regional will commence flights between its home base of Aberdeen, Scotland -- the focus of the U.K. oil industry -- and Kristiansund in Norway starting in August, it said today.

“There is latent, locked-up demand on these routes,” Chairman Ian Woodley said in an interview. “We are going into key regional commercial and industrial centers.”

Woodley led last year’s buyout of BMI Regional by Sector Holdings Ltd. after BA-parent IAG SA inherited the unit as part of a purchase aimed at securing flight slots at London Heathrow airport. Since then the airline has added bases and expanded into secondary markets where home carriers have retrenched.

BMI Regional generally offers morning and evening services as well as a mid-day flight to lure higher-paying business travelers, said Woodley, in his second stint at the carrier after founding a forerunner sold to British Midland in 1986.

The new incarnation, with 400 staff, has established bases in Birmingham and Bristol and added locations such as Antwerp, Hanover and Milan. A route between Bremen, Germany, and Toulouse, France, is its first not directly involving the U.K.

The purchase from International Consolidated Airlines Group SA was sealed in June 2012 and the business is “fast approaching a cash neutral position,” Woodley said, adding that the target is to be profitable in the second full year of operations.

BMI Regional has a fleet of 18 aircraft -- mainly 49-seat Embraer SA (EMBR3) ERJ-145s with four 37-seat ERJ-135s -- and leases-in extra planes for specialized services, including the transport of Airbus SAS employees between sites in France and England and a contract to fly pop group Depeche Mode on its concert tour.

The carrier isn’t averse to links with larger carriers and is pursuing code-share deals with Lufthansa and SAS, though progress is slow as network carriers focus more on reviving unprofitable short-haul activities.

To contact the reporters on this story: Robert Wall in London at rwall6@bloomberg.net; Chris Jasper in London at cjasper@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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