British Midland Airways Limited

On 1 November 1974, BMA began operating between London Gatwick and Belfast, where it replaced the service previously operated by British Caledonian. London–Belfast was BMA's first UK domestic trunk route and the first all-year round route it served in indirect competition with British Airways (BA). BMA's Gatwick debut also made it the only airline at the time to operate scheduled services from all five contemporary London airports – Gatwick, Heathrow, Luton, Southend and Stansted.

In January 1975, an agreement was reached for BMA to provide two Vickers Viscounts in Cyprus Airways livery to link Athens with Cyprus. A former WWII airfield at Larnaca was selected to serve the south of the island, following the Turkish invasion of Cyprus in 1974. The first flights departed Larnaca on 10 February 1975. On 4 April 1975, the Daily Mail chartered a BMA Boeing 707 to assist the Project Vietnam Orphans and The Ockenden Venture charities in evacuating 150 orphaned children from Saigon during the Vietnam War.

On 1 September 1976, jets began gradually replacing the turboprop fleet on most of BMA's domestic and European services, when the airline's first Douglas DC-9 (a second-hand -15 leased from the manufacturer) replaced Viscounts on the Heathrow–Tesside route.

In 1978, Minster Assets sought to sell the company. With the help of a Californian entrepreneur, Robert F. Beauchamp, Bishop raised £2.5 million to lead the management buy-out, and was appointed chairman as a result, afterwards stating "I had to borrow the money from an American citizen. Most venture capitalists want a return of 40% to make up for all their other failures and they want an exit strategy." That year, British Midland and British Airways agreed to swap some of their routes, resulting in BMA relinquishing its routes from Birmingham to Brussels and Frankfurt, and BAW handing over its routes from Liverpool to London Heathrow, Belfast, Dublin, Jersey, the Isle of Man and Glasgow. Annual passenger numbers topped 1 million for the first time in 1979.

1980s and 90s

In 1981, the CAA turned down BMA's application to fly between Heathrow, Glasgow and Edinburgh, but the Secretary of State for Trade and Industry upheld the airline's appeal against the CAA's ruling. The decision to overturn the CAA's ruling enabled the airline to commence its first domestic trunk route from the UK's premier airport on 25 October 1982, when it launched six daily return flights between Heathrow and Glasgow operated with DC-9s. Although these flights were not as frequent as the competing hourly BA shuttle, BMA offered keener fares and a full in-flight service (compared with the no frills shuttle). Following BMA's success on the Heathrow–Glasgow route, the airline began flying between Heathrow and Edinburgh (1983) and Heathrow and Belfast (1984). With the introduction of these services, BMA and BA were now in direct competition on the UK's three busiest domestic trunk routes. BMA's competitive pressure on BA resulted in the latter replacing its no frills shuttle service with an upgraded Super Shuttle that included a full breakfast, hot drinks and a free bar service on both Heathrow–Glasgow and Heathrow–Edinburgh from September 1983. (BA subsequently extended Super Shuttle to Heathrow–Belfast as well following the launch of BMA's competing service in 1984, in turn resulting in BMA abandoning Gatwick–Belfast which was taken over by Dan-Air.)

Also in 1982, BMA, together with British & Commonwealth (the owners of AirUK at the time), formed Manx Airlines, and the following year it purchased a 75% stake in Glasgow-based regional airline Loganair from The Royal Bank of Scotland. In October 1984, the Boeing 707 fleet was withdrawn, having been used extensively on lease operations for other airlines across the world.

In 1985, a new aircraft livery featuring a dark blue upper half and tail, with a light grey lower half separated by a thin, white stripe, was introduced. At this time, BMA was branded simply British Midland, and a new logo featuring a stylised red BM crowned with a white diamond shape appeared on aircraft tailfins. This livery subsequently featured a darker blue upper half and tail, with a deep grey lower half separated by two thin stripes, very dark blue at the top and red at the bottom. However, the logo on the aircraft's fins remained unchanged.

The conclusion of the first fully liberalised bilateral air transport agreement in Europe between the United Kingdom and the Netherlands in 1985, as well as a legal technicality exempting the airline from the "London [Air] Traffic Distribution Rules" (a government policy that sought to compel all airlines that were planning to operate an international scheduled service to or from Heathrow for the first time to use Gatwick instead) as a result of having operated a Heathrow–Strasbourg scheduled service prior to this policy coming into effect on 1 April 1978, enabled BMA to compete directly with BA between Heathrow and Amsterdam from 29 June 1986. This resulted in BMA becoming the first private, independent airline to compete with then wholly government-owned BA on an international trunk route from Heathrow.

The Diamond Club frequent flyer programme (FFP) launched on 1 October 1987, coinciding with the introduction of an enhanced business class style, single-class Diamond Service featuring a full meal and free onboard drinks service for all passengers, regardless of the fare paid, as well as airport lounges at the airline's major UK destinations. These service enhancements helped increase British Midland's market share on the main London–Scotland and London–Northern Ireland trunk routes to 30%. All aircraft in the fleet were named after diamonds, beginning with a DC-9 named The Tiffany Diamond, unveiled by Rosamond Monckton, the managing director of Tiffany's in London. The company slogan was Better for Business (2009–2010).

In March 1987, Airlines of Britain Holdings (ABH) was formed to act as a holding company for British Midland Airways and British Midland Aviation Services. British Midland operated its final Viscount flight on 20 February 1988, 21 years after the airline had first operated the type. That year, British Midland also became the first to operate the British Aerospace (BAe) ATP for which it had been the launch customer. The BAe ATP was the airline's last turboprop type. From 1 April 1990 Diamond Line was the name adopted for charter activities.

In 1992, British Midland became the first airline to offer a vegetarian choice of in-flight meals on UK domestic flights and one of the first in Europe to do so on domestic services. The following year, the airline introduced Diamond EuroClass on its European routes, the first time it had offered a separate cabin for business travellers. Initially, Diamond EuroClass was competitively priced, with the highest fares being the same as rivals' published economy class fares.

On 30 September 1996, British Midland began offering Diamond EuroClass on all its domestic routes, becoming the second airline in the UK after Jersey European Airways (which had pioneered business class on UK domestic routes in 1993) to offer a separate cabin for business travellers on domestic routes and the first to do so on domestic trunk routes from Heathrow.

ABH became British Midland Plc in 1997, when it was de-merged as part of major corporate restructuring. Towards the end of the 1990s, British Midland switched its aircraft suppliers from Boeing and Fokker to Airbus and Embraer, selecting A319/320/321s and ERJ 135/145s to replace 737s and F70/100s. In July 1999, Bishop formally opened the British Midland Training Centre in Stockley Close. That year, Scandinavian Airlines System (SAS), a shareholder in British Midland since 1987, sold half its stake to Lufthansa followed by British Midland joining Star Alliance (in 2000).

BMI-British Midland International

Following research that had established that people in the UK tended to confuse British Midland with the Midland Bank or British Airways and that many outside the UK could not relate to the term "Midland", the air carrier launched a new corporate identity in 2001, rebranding the airline as BMI British Midland (subsequently shortened to BMI), officially from 1 February. Aircraft received a new livery of royal blue, white and a fading Union flag on the tail, along with the new lower case BMI logotype. Also in 2001, BMI introduced the Airbus A330-200, its first widebodied aircraft type, into the fleet to enable it to serve the United States and other long-haul destinations. Bilateral restrictions implemented in the 1977 Bermuda II agreement meant the airline could neither fly its own aircraft to the US from its main base at Heathrow nor sell tickets on codeshare flights operated by Star Alliance partner United Airlines from the airport, as had been planned. Instead, it launched flights from Manchester to Washington Dulles and Chicago O'Hare in May and June 2001 respectively. Initially, the new A330s operated both routes; however, the Washington service was subsequently downgraded to a narrowbody operation using a Boeing 757-200 leased from Icelandair before being axed in 2005.

The airline carried 7.5 million passengers during 2002. By 2005, the total had risen to 10.1 million, the third highest of any UK airline. In early 2006, the Association of European Airlines (AEA) reported a drop in passengers carried and load factor for BMI mainline and regional services (excluding Bmibaby) whilst reporting increased loads for other AEA members over the same period.

BMI operated a service to Mumbai from London Heathrow between May 2005 and October 2006, after the UK and India amended their bilateral air services agreement. Services to Riyadh followed, commencing on 1 September 2005, after British Airways ceased to serve Saudi Arabia earlier that year. BMI also launched a scheduled service to Moscow Domodedevo in co-operation with Transaero Airlines on 29 October 2006, which used a dedicated A320 aircraft (G-MIDO) with special seating for the service, including leather seats and a 40" seat pitch. In 2007 the airline launched non-stop services from its Heathrow hub to Cairo and Amman, raising the airline's profile in the Middle East significantly. BMI announced on 5 November 2008 that it would end all longhaul operations from Manchester Airport. The two Airbus A330 aircraft based there were moved to Heathrow.

In February 2007, BMI bought British Mediterranean Airways (BMED), a British Airways franchise partner, and as a result gained access to new markets in Africa, the Middle East and Central Asia that were served by that carrier. As a condition of the sale, BMI sold BMED's Heathrow slots to British Airways for £30 million. BMED was fully integrated into BMI on 28 October of that same year.

The decision by the European Commission (EC) in 2008 to accord secondary slot trading by European airlines – the practice of buying and selling take-off and landing slots at congested airports – legal recognition resulted in BMI valuing its Heathrow slot holding at £770 million. Its first-time inclusion in BMI's 2007 annual report also resulted in a huge boost to the airline's net asset value, which stood at only £12 million the year before. It can therefore be argued that the EC's decision to legalise this practice made BMI an attractive takeover target for other Heathrow-based airlines and helped it avert bankruptcy.

In November 2009, following the complete takeover of BMI by Lufthansa, the airline announced a restructuring of its mainline and regional operations in an effort to suspend loss-making routes and adjust capacity. The measures included a fleet reduction of nine aircraft from the mainline fleet (two of which were operated by BMI Regional) and the suspension of routes from London Heathrow to Amsterdam, Brussels, Tel Aviv, Kyiv and Aleppo in 2010. Seasonal routes from London Heathrow to Palma and Venice were also discontinued. It was said that the restructuring could result in the loss of around 600 jobs – around 13% of the airline's workforce.

On 12 January 2010, BMI announced that the number of daily flights between Dublin and London Heathrow would be reduced from 28 March from six to four due to the economic climate, which depressed consumer demand. This resulted in the closure of the Dublin base, which consisted of one plane and 33 cabin crew.

British Midland International

In April 2010, the airline announced it would begin using British Midland International name, whilst retaining the BMI logo and continuing to be known by those initials in the domestic market. The decision to revert to the old British Midland name and to spell out for the first time what the I in BMI was supposed to stand for was taken in response to research showing that for passengers based in the Middle East, who accounted for a significant number of the airline's premium bookings, BMI did not mean anything, and that these people preferred a name with the word "British" in it.

Following increasing heavy losses that exceeded £100 million per year by 2012, BMI decided to stop offering business class on domestic flights and introduce a number of new, longer range international scheduled services from Heathrow to ensure the most profitable use of its highly prized (and sought-after) slots at the severely capacity-constrained airport. This entailed aircraft downsizing (replacing Airbus mainline jets with Embraer regional jets), frequency reductions and route cutbacks on the airline's loss-making short-haul routes from the airport, including axing its by then heavily loss-making Heathrow–Glasgow route from 27 March 2011. The decision to exit the Heathrow–Glasgow market after almost 30 years' continuous operation was blamed on a big rise in the fees BAA levied on domestic passengers at Heathrow, which had resulted in unsustainable losses of £1 million per month.

BMI's last-ever commercial flight using a "BD"-prefixed flight number touched down at London Heathrow on 27 October 2012. It was operated by Airbus A321-231 G-MEDF. Legally the airline had been merged into British Airways on the previous 19 April.

Former fleet

BMI formerly operated the following aircraft types:

The Kegworth air disaster: on 8 January 1989, British Midland flight BD 092, a recently delivered Boeing 737-400 (registration G-OBME), crashed onto the embankment of the M1 motorway just short of the runway of East Midlands Airport, Leicestershire. Forty-seven of the 118 passengers lost their lives.

On 24 August 2010, an Airbus A321-231 (registration G-MEDJ) en route from Khartoum to Beirut as flight BD996 suffered a serious electrical malfunction which caused the intermittent failure of the captain and co-pilot's electronic displays together with the uncommanded application of left rudder trim. The latter caused the aircraft to stray 20 nautical miles off course. The aircraft was cruising at 36,000 ft at the time, with both autopilot and autothrust engaged. The captain ultimately disengaged both and flew the aircraft manually, landing in Beirut without further mishap. Airbus indicated that an electrical power interruption had occurred which had caused a reset of the Flight Augmentation Computer (FAC). Such an event may cause a small incremental offset of the rudder trim, according to the aircraft manufacturer. The Air Accidents Investigations Board (AAIB) subsequently issued Safety Recommendation 2010–092, recommending that Airbus alert all operators of A320 series aircraft of the possibility that an electrical malfunction may not be clearly annunciated on the Electronic Centralised Aircraft Monitoring system (ECAM) and that such an event may lead to an uncommanded input of rudder trim.