CASE STUDY

Case Study

Case Study

Introduction

MOST people have teenage ambitions and Michael Bishop's was a burning desire to get involved in aviation. But while few people fulfil their desires, Sir Michael Bishop went on to buy an airline through a then little-known process called a management buy-out. Yet many will argue that the now 67 year-old chairman of BMI left his best deal until last, selling the Castle Donington-based airline to Lufthansa for £223m while the industry is in the teeth of an economic turbulence never seen before. A new analysis from the 52-country INTERHEART study suggests it is time to bid adieu to body-mass index (BMI) as a reliable predictor of MI risk (Lufthansa News 2009 12). Waist-to-hip ratio (WTHR) is a far better predictor of MI risk across diverse populations, INTERHEART investigators report. Their observations carry important implications for people and populations hitherto considered to be low risk on the basis of their BMIs. "We need to redefine how we look at obesity," study coauthor Dr Arya M Sharma (McMaster University, Hamilton, ON) told heartwire. "Traditional definitions have been based on BMI, but what this paper very clearly shows is that, irrespective of your BMI, it's really your waist-to-hip ratio that's important.

Case Scenario

The deal that would mean the German carrier would have a binding first dibs when Sir Michael decided to sell his controlling stake was agreed in the optimistic blue skies of an expanding world economy. Back then, BMI's ownership of Heathrow landing slots would have looked like gold dust. That was then, this is now, and all airlines have since been hit by a brutal economic environment that has seen passenger numbers fall significantly while fuel and aircraft leasing fees still have to be paid. The result? In the words of the Economist, the sale deal 'had to be imposed on Lufthansa, almost literally on the steps of the High Court in London'. The question now is what Lufthansa will do with new routes, new planes, new staff and a low-cost airline it has added to its inventory while everyone else in the industry is desperately trying to cut capacity and costs.

Sir Michael won't be drawn on that. "I can't speak for the new owners," he says. "It is their business now and it was always likely they would take it over. "The important thing, and my main priority, has been that BMI has come into the ownership in these most difficult of times of a much larger airline with substantial resources." Lufthansa is going to need all its financial muscle. Airlines have been through recessions before, but Sir Michael says this is the hardest they have faced. "There have been three recessions, each of which has been serious for the airline industry, but this has turned out to be the most difficult that the industry has had to weather. When you see the issues that BA is facing, and Virgin talking about cutting capacity…this is one of the most difficult times the industry has ever ...