Midlands-based airline group bmi yesterday posted a huge jump in annual profits - over-coming the impact of soaring fuel costs through a major change in strategy.
The carrier, which has its headquarters near Nottingham East Midlands Airport, said 2005 pretax profits came in at £10 million, a 284.6 per cent jump from the previous year's figure of £2.6 million.
Turnover increased 4.7 per cent, from £830.1 million to £869 million.
The airline, which is now the second largest operator at London's Heathrow Airport, said a move to focus on more profitable business traffic and the more efficient use of its fleet of aircraft had enabled it to negate static passenger numbers, unchanged at 10.5 million.
The airline faced a fuel bill of £37.5 million in 2005, but this was in part recovered by passenger surcharges as the group - home to low-cost airline bmibaby as well as full-service and regional opera-tions - turned operating losses of £3.2 million in 2004 into profits of £5.5 million last year.
Chairman Sir Michael Bishop, who has a controlling stake of more than 50 per cent in the group, said the figures for 2005 demonstrated good progress.
"We beat expectations last year and bmi's strategic focus created further substantial improvements in 2005. Our concentration on higher yields, better resource allocation and cost control has delivered a good foundation for future growth," he said.
"The improved performance was a result of the group's focus on yield growth within each of its airlines, on more efficient and effective use of aircraft and other infrastructure and on rigorous cost control across the business."
Under chief executive Nigel Turner, the company has set itself up to focus its main bmi operation on business traffic while at the same time managing availability of the lower-yield traffic.
It also completed a fleet rationalisation which enabled its three divisions to operate a single fleet, with the Airbus A320 and 330 family used for Heathrow and long-haul operations, Boeing 737s for b mibaby and smaller Embraers for BMI Regional.
In addition, the group rationalised engineering activities, outsourced heavy maintenance and developed more e-booking services as part of a wider drive to improve efficiency levels.
Sir Michael said: "The business environment remains tough but we are confident that this strategy is proving successful for bmi."
The airline's full service and regional services operate 1,700 flights a week to locations including Copenhagen and Las Vegas, while bmibaby - established in January 2002 - runs more than 750 flights a week.
Sir Michael said the launch of bmi's first long haul routes from Heathrow to Mumbai and Riyadh marked an important step forward in the group's development.
"BMI will extend the number of long haul destinations it serves from Heathrow with the launch next month of a three times a week service to Jeddah," he added.
"Bmibaby continues to widen its market penetration and presence. The UK's second l argest low-cost carrier launched services from its fifth base at Birmingham at the start of 2005, which proved to be its most successful launch to date."
Sir Michael also said the group had a very clear strategy.
"In our mainline business we are focusing on quality business-purpose traffic and at the same time managing the availability of the lower yield - the amount paid by each passenger - traffic.
"We are willing to accept volume reductions in certain markets if it improves overall levels in yield, resulting in increased profitability.
"This was the case last year and is the case so far this year, where we are already ahead of our comparative 2005 financial performance," the chairman added.