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Captain of BMI flies the flag for aviation(Daily Mail (London) (KRT) Via Thomson Dialog NewsEdge) Jul. 27--Sir Michael Bishop, 64, has spent 41 years working his way up from baggage handler to chairman of airline Bmi, so it would be understandable if he were thinking of heading for the departure lounge. But retirement is is the last thing on his mind, as I quickly discover. "Everyone always asks me that question. I just find it quite amusing." "I have still got a long way to go with Bmi," he says, adding that Maurice Flanagan, boss of Dubai-based airline Emirates, is 77 and still in the pilot's seat. I have been put firmly in my place. Dubbed "a cute little brute" by the late Lord King, the former chairman of British Airways, Bishop enjoys a scrap. Underneath the dapper suit and charming manner is a steely individual that few would want to cross. He is also one of only a handful of major-league businessmen who is is openly, albeit discreetly, gay. Although it is no secret, it is not a subject Bishop is keen to talk about. He simply says he is not married and then steers the conversation back to Bmi, something he clearly does love discussing. Bmi, the UK's second biggest full-service airline after BA, has grown from humble beginnings in 1938 to operate 1,700 flights a week over a network of 36 airports, but Bishop is still not satisfied. In common with other airlines, bmi is still recovering from the aftermath of September 11. In 2002 it swung into a loss of 19.6m as travellers decided to stay at home. Over the following four years, Bishop slashed costs and embarked on a strategic shake-up, focusing on higher-spending passengers. The Derbyshire-based business last year launched services from Heathrow to Mumbai and Riyadh. It has also introduced flights to Moscow and Jeddah. Profits quadrupled in 2005 to 10m from 2.6m the year before -- but the boss thinks it is not good enough. "We are not satisfied with the return we are getting from our investment," explains Bishop. "We should be doing a lot better than that." This kind of talk is typical from Bishop, who sees himself as David taking on Goliath in the shape of British Airways. In 1986 bmi convinced the British and Dutch governments to let it to fly from London to Amsterdam, marking a watershed in European air travel. It was the first time that an independent airline was allowed to compete with national carriers BA and KLM. That opened the door for the rise of low-cost carriers such as easyJet and Ryanair, bringing cheap travel to millions. But the same cannot be said for routes to the US. Last month, bmi celebrated 20 years since deregulation in Europe. Bishop used the opportunity to make a case for "open skies" on the lucrative routes from Heathrow to the US, which is dominated by BA and Virgin Atlantic. The government is considering liberalising the routes, but in the past lobbying from BA has stymied any moves. Referring to the probe into fuel surcharges at BA and other unnamed airlines, Bishop said: "Recent events highlight the importance of transparency in competition in air travel. The consumer will always be the loser if fares are influenced or set by any forces other than a free and deregulated market." More than 2.7m people travelled on scheduled airlines between Heathrow and New York in 2004, making it the most important inter-continental market in the world. Bishop argues that given its size, it must be allowed to operate freely. Inspired by his father, an Australian who arrived in the UK in the 1920s and built up a small engineering firm in Manchester, Bishop always wanted to run his own business. Aged 16, he worked as a baggage handler in the school holidays at Manchester Airport and fell in love with the world of aviation. But he says his interest in the industry was always commercial. "I never wanted to be a pilot. It was just the beginning of the jet era and I thought to myself, this is a growing industry." By the age of 21 he was managing a traffic-handling unit called Mercury Airlines, which was sold to bmi in 1963. Over the next 15 years he worked his way up to being general manager of bmi -- then known as British Midland Airways. In 1978, aged 36, Bishop convinceda Californian dentist, Dr Robert Beauchamp -- who was looking for somewhere to invest his savings -- to lend him the cash to fund a management buyout. This was before the days of venture capitalists, so finding someone who was willing to invest was difficult, says Bishop. Beauchamp had bought two Boeing 707s which he was looking to lease out. He did a deal with bmi to lease the aircraft in return for the loan of the buyout funds. With the money he received from Beauchamp, Bishop bought 75pc of the company from Minster Assets together with bmi fellow directors John Wolfe and Stuart Balmforth for 1.8m, valuing it at 2.5m. The dentist took a 25pc stake, which he subsequently sold back to Bishop. In 1988, when bmi sold a quarter of the company to Scandinavian airline-SAS, the value of the company had ballooned to 100m. Bishop was knighted for services to the airline industry in 1991, aged only 42. Despite being very much at the helm of bmi, Bishop does not call the shots on a day-today basis, instead relying on his management team, led by chief executive Nigel Turner. The focus for this year is to improve the profitability of the business and to expand bmibaby, the low-cost arm. Pilots at bmibaby are threatening to strike over pay, which could cause travel chaos over the August Bank Holiday. Bishop contests the notion that bmi missed a trick on low-cost flights -- bmibaby was only launched in March 2002 -- arguing that it was right to focus on being a quality alternative to BA. Speculation has been rife over what Bishop, who now owns 50pc plus one share of bmi, could do with his stake. He bought out his partners Wolfe and Balmforth in May. SAS and German airline Lufthansa own the remainder. Although he has no thoughts of retiring, Bishop does have an eye to posterity. "I have set up the Michael Bishop Foundation, which will inherit my share of the business as I don't have any children," he says. One irony for him is that if he succeeds in his six year-long campaign for open skies between the UK and the US, bmi will become a prime takeover target. Analysts reckon the airline will immediately fly into the sights of companies wishing to capitalise on the lucrative route. But that is a problem for the future. For now, Bishop is far too busy taking on BA. |