LONDON, Jan 20 (Reuters) - British airline bmi said on Thursday it had launched a sweeping review aimed at reviving its main European and long-haul operations and offset escalating fuel and airport costs.
Bmi, one of Britain's three full-service airlines, also said it expected to break even again in 2005 and hoped to add new long-haul routes, possibly in South Africa and the Middle East.
Bmi Deputy Chief Executive Tim Bye said the airline, formerly known as British Midland, was reviewing all aspects of its mainline business following a management shakeup late last year.
"We are looking at everything from the number of classes to product on board, product on the ground and ground service issues," Bye told Reuters in an interview.
"Is there a better way of operating that business to take it forward?"
He said bmi, which flies short-haul European routes and long-haul to the United States and the Caribbean, hoped any changes could help offset "significant" increases in fuel costs and higher airport charges at Heathrow in 2005.
BREAK EVEN
Unlisted bmi, which suffered badly amid a downturn in travel following September 11, will report in April that it broke even in calendar 2004 following two years of losses. Bye expects to remain in the black this year.
"We are not expecting to slip back beyond break-even," Bye, who was appointed deputy at bmi in November, said.
Bmi starts flying to India for the first time in March if the UK government upholds a regulatory decision to grant it new routes to Bombay.
Bye said it hoped to continue adding new long-haul routes this year and was taking a look at Saudi Arabia following a British Airways decision to suspend its services there from March.
He said the company's low-cost airline, bmi baby, had recorded increased load factors and, unlike other low-cost rivals, its yields -- or average revenue per passenger -- improved in 2004.
"It is not the doom and gloom we have been hearing from some of the other guys," Bye said of bmi baby, which is close to choosing a new chief executive.
The group's regional business was not expected to grow significantly.
There was speculation a year ago that bmi may tie up with Richard Branson's Virgin Atlantic, mainly because Virgin wants access to bmi's eagerly sought takeoff and landing slots at London's congested Heathrow airport. Bmi has said it is not interested.
"It takes two to tango and we are not in that mode," Bye said.
Bmi is controlled by Chairman Michael Bishop and 30 percent owned by German carrier Deutsche Lufthansa while Scandinavian airline
SAS has 20 percent.
REUTERS