INTERVIEW
Peter Simpson, chief executive of BMI Regional, talks to Paul Revel about feeding long-haul travel, bespoke routes and the collapse in oil prices
of BMI o Paul ding
PETER SIMPSON HAS SPENT MORE THAN 30 YEARS IN THE AIRLINE INDUSTRY. He took up his latest role, as CEO of BMI Regional, in March 2015. The airline became an independent carrier in 2012, when BMI was integrated into British Airways. At the time he was managing director of BMI Group, so he led that process. Simpson is based at the airline’s HQ at East Midlands airport. Of its six UK airports, the biggest hub is Bristol, serving seven routes. BMI Regional recently announced a new Southampton-Munich route, starting in April. This is part of the airline’s expan- sion of Munich as an intra-European hub. “Other routes we’ve announced out of Munich are Bergamo in Italy, Rostock in northern Germany and Norrkoping in south east Sweden.” These flights added to Bern, Bruno, Rotterdam and Bristol bring a total of eight destinations from Munich. “These will be alongside our Lufthansa code-share, which is where we’ve seen the value both for ourselves and for them,” says Simpson. “So we are continuing to feed long-haul travel out of destinations that they find difficult making work with their size of aircraft. And ours seem to be uniquely placed to fill those gaps.” This strategy of expanding on code-share routes, while at the same time feeding partners’ long-haul flights “has been working extremely well”. Another key element of BMI Regional’s
strategy is focusing on business travel by targeting particular routes. “For us and the kind of aircraft we fly, which is the Embraer, typically a 50-seat jet, the focus is on
business travel, our core element,” he says. “So you’re looking to put in place schedules and destinations that work for the corporate client. “There have been interesting changes
over time. Working more closely with cor- porate customers, we’ve actually been able to identify specific routes shaped around their needs.” Other route demands have come to the airline’s attention via travel management companies, he adds. This ‘bespoke’ level of service is at the top of what Simpson describes as four tiers – the lowest being purely price-based, rising to added levels of flexibility, then benefits such as fast-track and lounge.
A NEED FOR CONSOLIDATION? Last year BBT reported on Lufthansa CEO Carsten Spohr’s view on the EU market being overpopulated with airlines, and the need for consolidation. What’s Simpson’s view on this? He agrees there is a “significant number” of low-cost operators and asks: “Is that sustainable relative to the market size? And the answer to that is, probably not. There is likely to be consolidation.” But he adds: “From my own perspective, that’s not the market we play in.” So what is BMI Regional’s niche that
separates it from the likes of Ryanair and Easyjet? Smaller aircraft providing point- to-point destinations for core business travellers on routes that would otherwise not be served, says Simpson. This, in turn, can benefit the route des- tinations, he believes. “It actually enhances
I think the low oil price is a community than just airline travel
BUYINGBUSINESSTRAVEL.COM
the ability within regions to drive increased GDP, because you get inward flow as well as outwards. Bristol-Milan being an example, which wholly started for a corporate cus- tomer but the passenger volumes then driving inward investment into the Bristol area. It works both ways, and we are seeing that on our intra-European services.” What’s his take on partner Lufthansa’s
controversial global distribution system (GDS) fee, introduced last year? “The ar- gument [over distribution costs] has been going on forever, and I think there’s a clear recognition that the charges – particularly to the legacy airlines – that are levied by the GDSs are so out of proportion relative to the service provided and the margins that are made. Lufthansa has taken a brave step to try and break that stranglehold.”
OIL AND GAS
The oil price collapse has seen many airlines return to profit for the first time in years. But what is the impact on traffic at BMI Regional’s Aberdeen hub, where the core industry is oil and gas? Simpson says the implications go far beyond Aberdeen. “I think the low oil price is a double- edged sword for a much wider community than just airline travel. The impact is much broader. I don’t believe this sudden reduc- tion in oil price has been helpful for UK, European and worldwide GDPs.” Like many airline bosses, Simpson despairs of lack of progress on south-east airport expansion. “I think the biggest frustration for everybody is government inaction on this, whether you’re in the Heathrow camp or the Gatwick camp. He adds: “It’s bordering on criminal the amount of time the UK government’s taking to drive forward on something they know is required for UK plc.” The airline industry has many challenges, but one thing it’s not is dull, according to Simpson – who didn’t plan to be in it so long. “I suspect I’m no different to a number of people who start something and think: ‘I’m only going to do this for a short period of time’ – and suddenly you look at the dates and say: ‘Really, it’s 30 years later?’ I think it is a genuinely exciting industry. Once it grabs you, it’s dynamic and ever-changing, and that keeps you forever interested.”
Peter Simpson was appointed as CEO of BMI Regional in March 2015. He was previously British Airways’ Gatwick director for two years. He joined Manx Airlines as financial controller in 1985, and has since served as finance director for BA Connect, managing director at BA Cityflyer and then managing director for BMI.
BBT MARCH/APRIL 2016 33
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124