Tiered pricing sparks bmi profit growth
A tiered pricing system and improvements to its online booking helped bmi rack up a £10 million profit in 2005 as chairman Sir Michael Bishop heralded a new era for the airline.
The performance was a marked improvement on 2004 when the airline posted a £2.6m pre-tax profit.
Turnover increased from £830.1m to £869m with operating profit climbing from a £3.2m loss in 2005 to £5.5m in the 12 months to December 31 2005.
Bishop said: “These figures demonstrate good progress. Our concentration on higher yields, better resource allocation and cost control has delivered a good foundation for further growth.”
The year also saw the launch of its first long haul routes from Heathrow, a move described by Bishop as a “an important step forward in the group’s development.”
Among the “three underlying factors” behind the improvement was the introduction last August of modular pricing from Heathrow where the carrier ditched nearly all business class fares and began offering a three-tiered ticketing scheme – tiny, standard and premium.
The move was designed to more effectively compete with no-frills rivals.
“[It] allows travellers to build the right fare and service levels they need,” Bishop said in a statement.
Improved speed of booking and check-in reduced costs while a choice of catering during flights also lowered costs and reduced wastage, he said.
For 2006, Bishop said the mainline airline would focus on “quality business-purpose traffic” while “managing the availability of the lower yield.”
“We are willing to accept volume reductions in certain markets if it improves overall levels in yield, resulting in increased profitability,” said Bishop.
Passenger volumes in 2005 remained stable at 10.5 million with load factors down from 71.9% to 71%.
Bishop said long haul will continue to be a key growth area with a three times weekly service from Heathrow to Jeddah launching in April.
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
CCS Insight: eSIMs ready to take the travel world by storm
Germany new European Entry/Exit System limited to a single airport on October 12, 2025
Airlines suspend Madagascar services following unrest and army revolt
Qatar Airways offers flexible payment options for European travellers
Air Mauritius reduces frequencies to Europe and Asia for the holiday season