Leading an airline spin-off to resurgent new heights

As chief executive of BMI Regional, Cathal O’Connell has masterminded a remarkable turnaround in the small carrier’s fortunes

Cathal O’Connell: “The BMI brand has huge heritage, over 70 years of heritage.” Photograph: Nick Bradshaw

Cathal O’Connell: “The BMI brand has huge heritage, over 70 years of heritage.” Photograph: Nick Bradshaw

Fri, Jul 25, 2014, 01:10

Two years ago, Cathal O’Connell was facing a task that many were bluntly telling him was impossible. He and a small team in East Midlands Airport in Britain were attempting to set up an entire IT system and infrastructure for a new airline in just 12 weeks.

He had just taken over as chief commercial officer of BMI Regional, which had been spun out of the old BMI following its purchase by International Airlines Group (IAG).

BMI Regional had been bought by brothers Peter and Stephen Bond – former owners of Bond Helicopters – for £8 million. The transaction had gone through in June 2012 and IAG was committed to providing IT back-up until October, but after that, the new airline was on its own.

Failure to get its own systems up and running by the end of that month would have grounded the independent carrier.

“Had we not achieved that deadline the airline would have ceased to operate,” O’Connell recalls.

“The overall infrastructure was designed to support the BMI Group and it was being shut down at the end of October and IAG, obviously, wouldn’t continue to operate it just for us.

“We were told at the time that it was impossible to do, we had to create a complete new IT infrastructure, new reservation systems and finance systems.

“In the UK it takes about six weeks to get a business bank account, we were trying to get a business up and running and transitioned over within 12 weeks.”

The task, he says, was akin to doing an “engine change in flight”. On the one hand, they were running the business, on the other, they were creating the new infrastructure on to which it had to be switched, without any disruption.

The trick lay in simplifying everything. The detailed design of the old BMI systems took up three full A3 pages (slightly larger than a single page of this newspaper). He and his colleagues boiled that down into one A4 page.

“The company was using systems and processes that were designed for a much bigger airline, because it was a subsidiary of that bigger airline,” he explains. “So we couldn’t just copy everything that they did, we had to right-size for our business, and make sure that everything was fit for our purpose. We’re an operator of 18 aircraft, we needed to make sure that the technology that we applied, the administration we put in place, were all suitable for what was basically a new start-up.”

After an intense few weeks the new system met its end-of-October deadline and BMI Regional stayed in the air. O’Connell became chief executive on November 1st. By then the company was dealing with another challenge: its brand.

Its complicated recent history had muddied the waters for many customers. BMI was British Midland International, which had been around for decades. In 1996, it bought Aberdeen-based Business Air and rebranded it as BMI Regional.

Lufthansa bought the entire group in 2008 but sold it to IAG, owner of its rival British Airways, in 2012 for £175 million and spun BMI Regional off to the Bonds. British Airways absorbed the rest of the group, consigning its BMI Mainline and its low-cost BMI Baby brands to the dustbin.

This left the regional division’s new owners with a problem: customers and the media assumed that the brand was no more, so it had to remind them that it still existed, particularly as it was continuing to operate services and had an operations base at Aberdeen.

So, why not rebrand? “Well,” O’Connell says, “the BMI brand has huge heritage, over 70 years of heritage. People have heard of it, people know it, even though we had to tell people we still exist, they understood that there was a whole history to BMI. We have ownership of the brand itself and it has, if not global recognition, European recognition.

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