From the BBC:
The owner of British Midland International (BMI), Lufthansa, has said it has not yet decided on a buyer for the carrier. In November the German airline signed an agreement with BA owner, International Airlines Group (IAG), to work towards a final deal. However, the agreement was not exclusive and Lufthansa has now said it also has a deal with Virgin...
BMI, which is based in Castle Donington in Leicestershire, operates flights to Europe, the Middle East and Africa. It has 8.5% of the landing slots at Heathrow, the UK's busiest airport, which are seen as the main attraction of a purchase. If IAG were to purchase the group it would give it control of more than half the landing slots at the airport.
However, rival Virgin Atlantic has said the deal would be uncompetitive. "British Airways' hold over Heathrow is already too dominant," a spokesperson said after the IAG deal was announced...
Lufthansa bought the 50% of BMI owned by its then chairman Sir Michael Bishop in 2008, taking its holding to 80%. It decided to sell it as the carrier's losses widened. BMI has reported a loss of 154m euros ($213m; £133m) for the first nine months of this year, hit by rising fuel costs and social unrest in some of its destinations in North Africa and the Middle East.
From The Guardian: "IAG had emerged as the frontrunner in November when it confirmed that it had reached "an agreement in principle" to acquire bmi, which would take its share of slots at Heathrow from 45% to 53%... Both bidders are now conducting due diligence, amid reports that Virgin Atlantic has bid £50m for the loss-making carrier."
Monday 12 December 2011
State-protected monopolies are worth more than actual profits
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4 comments:
True I think. What do you mean by profits though? Rent, interest, wages?
RS, I mean earned profits of the company (by definition, after paying wages which are also earned profits), everything above the rental element. The annual rental value of those slots must be in the order of £300 million (one tenth of my conservative estimate of £3 billion for all Heathrow slots).
So if BMI is reporting losses of £100 million a year, the flying business itself if making losses of £400 million a year, subsidised by £300 million quasi rental income.
We could further adjust that for any interest paid by BMi (which is a share of income, not an expense) but that's too much detail.
MW, yes yes but
Rent = income from landing slots, you covered that thx
Wages = income from all human exertion, you covered that thx
Interest = income from invested capital. This is all that is left over for distribution.
Is this what you mean? If so why not just say it? No offence but its simpler.
The term "profit" is an appalling obfuscation only accountants seem to like (: Its a great aid to the 1%
I used to drive straight onto Castle Donington and then walk into the hangers where BMI's aircraft were being serviced*... I doubt you'd be able to do that these days without being accosted by several layers of gun toting folk asking for ID.
Having seen Boeing 737s stripped down to their bare bones I've surprisingly never been nervous of flying.
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