What Does a Pending Sale of bmi Mean for the Diamond Club frequent flyer program?

I’ve been watching the moves across the pond that Lufthansa has been making with british midland with some interest, bmi has been a money losing operation and Lufthansa wants to unload it. There’s movement along that front, what interests me most is what becomes of the Diamond Club frequent flyer program, all the commentary that I’ve seen to date says something along the lines of “we don’t know and I won’t speculate.” I’ll offer a slightly different formulation: we don’t know, but I will speculate.

First came reports that Lufthansa was offloading bmi’s regional operation. My thought at that time would be sell off the pieces, and shut down what remains, transferring bmi’s Diamond Club members into the Miles & More frequent flyer program.

There’s good and bad to that outcome, the good is that a bmi Gold member like me would likely be granted Miles & More Senator status, possibly even for two years. I like the idea of being a Miles & More Senator, in part for the duration of the status but mostly to say that I’m a Senator. That’s an important person where I live, in DC.

Of course bmi isn’t just about status, the mileage program has long had some of the better values out there, first for its earning potential especially on premium cabin fares and second for its redemption options, offering cash and points awards to stretch the miles and also offering business class redemptions at a 50% premium over coach across the board. While bmi Diamond Club hasn’t had a whole lot of partnerships, and I was disappointed when they dropped Hertz (1700 mile rentals!) for Europcar, it’s long been my Hilton double dip partner — 1000 miles per night up to 3 nights per stay.

Moving bmi miles over to Miles & More means that those points are worth less. Moving bmi miles over to most any program means that bmi miles are worth less. Although at least we wouldn’t have to deal with their call centers — a UK number with UK hours that forward to India, with some of the least-trained agents of any travel provider and some of the worst call quality I’ve ever experienced as well.

Now, as GhettoIFE notes, there’s apparently a letter of intent signed to sell bmi to the parent company which owns British Airways and Iberia.

The prize here, of course, are bmi’s slots at Heathrow. The airline has nearly 10% of the slots at Heathrow, it’s why Lufthansa was interested in the first place, if they believed that there was a long-term play to make at a congested airport I’d have expected them to keep the slots and shut down the rest, but that doesn’t seem to be the case here. Instead, they’re looking to offload debt and generate a little cash (specific details of a deal are unconfirmed) in exchange for slots. There’ll certainly be scrutiny of any such deal by government competition authorities, but let’s assume the deal proceeds.

One could imagine continuing to operate bmi as a standalone but it’s losing money and it’s the slots that are most valuable, presumably in some reconfigured fashion given the rest of the BA operation in London. So that seems unlikely.

It’s certainly a possibility that bmi Diamond Club gets folded into the British Airways Executive Club and we want up with Avios points.

Let’s assume that happens, I am less enthralled with British Airways Gold status (which I would hope to get for my bmi Gold) than I used to be, since they’ve eliminated the open doors policy on their lounges where top tier members could use BA lounges even when not flying the airline. And since I’m seriously contemplating an American Airlines Executive Platinum challenge I wouldn’t then need the top tier status in oneworld. Plus of course I’m nervous about changes to the award chart that are expected to come in a couple of weeks.

What I would hope might be a possibility if bmi exited Star Alliance as a result of a deal with BA/Iberia is that there would be some sort of Star Alliance-wide status match option, with other Star carriers welcoming bmi’s elites into their own ranks. I’d probably jump on over to Asiana (along with Asiana’s 4 year status policy and generous requalification). At least I’d lock in lounge access for a few years. A couple of years ago I looked at the easiest ways to earn and keep Star Alliance Gold status. Turkish Miles & Smiles is actually intriguing, with two years of status and a requirement for 37,500 status miles during those two years to requalify (though not all fares are full mileage earning).

I’m two segments (DCA-LGA and ORD-DCA) away from requalifying for bmi Gold status. I’ve known that the future of the program has been in some doubt for awhile, and yet I’ve continued to earn miles anyway. Whatever happens, I hope the transaction doesn’t close too quickly and Diamond Club members will have time to issue award tickets on Star Alliance partners if they prefer, and at least to issue tickets under the Diamond Club award chart — as opposed to the Miles & More chart or the Executive Club chart.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I want to be a Senator so badly! Not for the title, but for the M&M access to LH and LX F, plus 50% off companion awards.

  2. I predict, based on pure speculation, that Virgin Atlantic buys bmi and joins the Star Alliance that way. What will drive this is primarily that Virgin will be looking to expand its Flying Club profitability in the US, where so far, despite generous signup bonuses (up to 45K) and mileage earning (1.5 miles per dollar) with the BOA credit card has not met expectations. However, add in redemption oppurtunities within Star Alliance and we are really talking about an attractive loyalty program. Virgin must be jealous of the revenue the BA Visa is generating for BA and has been looking to join an alliance (Star being the frontrunner) anyways so all the pieces add up. The slots at LHR are just gravy.

  3. @Mordy highly unlikely as Virgin Atlantic had teamed up with Etihad for the bid and Lufthansa would never let a Middle East set a foothold using its assets, the same has been quite evident from the Investors conference slides where Lufthansa clearly perceives Middle East carriers as its biggest threat at the moment.

  4. The other questions is what happens to current award tickets booked on BMI via Star Alliance? will new owners still honour them? Since I am flying BMI in March, that is important for me.

  5. “There’ll certainly be scrutiny of any such deal by government competition authorities…” This will surely still come into play, correct?

  6. I’ve just gone gold on BMI for my 8th consecutive year – 10 would mean gold for life under Diamond Club rules, one of the reasons I didn’t switch years ago. Guess that’s out the window then…

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